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Archive for the ‘Foreclosure Crisis’ Category

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Without Ethics a Free Market Is Bound to Fall Into a Foreclosure-Like Crisis

Posted on February 12th, 2009 in Foreclosure Crisis | No Comments »

It is inevitable that without ethics a free market is bound to fall into a foreclosure-like crisis. This applies to all spheres of life. Society is there and society has been created to tame these wild predatory instincts through discipline and regulations. Once the fences collapse the wild jungle marches in and in the name of freedom the powerful prey on the weak – it is the law of Nature.

The market gets destabilized without disciplinary regulations, the bubbles burst and inevitable the foreclosure crisis takes place. Buying and selling begins to slow down causing industries to be closed, businesses to be shut and this results in massive job losses.

Globalization has been the direct result of the revolution information technology. But shady trading has bred a risky uncertain atmosphere that has led to the worst credit crunch ever experienced.

If temptation and greed is behind market movements then a global slump begins. En masse there are job losses. The losses are too big for even governments to manage. Thus the crux of the problem is maintaining the balance that allows the economy to move along a middle path. It is time to rethink on the reorganization of the market keeping in view the welfare of the majority.

First and foremost the government has to use its clout to free business from the grip of behemoths. It is not an impossible suggestion because governments have the power – it is just that they do not have the will. But the government should remember that in the long run it is answerable to the people. It cannot whimsically resort to any action that only makes the rich richer and the poor poorer. It cannot indefinitely suck the taxpayer’s money without showing gains.

The economically backward has to be raised to the standard of the economically forward. By this the middle class will form a broad base. The middle class development is indicative of the movement of the tide. It maintains a balance between generation of wealth and its distribution. Ethics is the key.

Both ends of the pole represented by capitalism and socialism have proved to be incapable. A socialistic outlook with malfunctioning management causes collapse. Capitalistic development will be successful propelled by socialistic outlook. The bottom line is that no matter what ism is being followed it is the morality of men in power that make and unmake kingdoms. If it is Nero who is fiddling then Rome will burn.

Bank Foreclosures by Top States

Foreclosure Crisis Is Not a Distant Story to Bollywood

Posted on February 11th, 2009 in Foreclosure Crisis | No Comments »

The foreclosure crisis is no distant story. It has touched the world’s largest film industry, Bollywood. Launches are being held back by producers. The biggest stars are cutting down on their fees. According to Anil Nagrath, President of the Indian Motion Pictures Producers’ Association, there are no new film projects being launched. Only films where money has already been invested are being completed. Only the biggest films and producers will survive, that too with a severe beating. Once the ongoing projects are finished in the next six months, the true picture will start emerging, according to Nagrath. As against the normal release of three to four films each week, Nagrath expects only a release every month. Cine workers are striking for higher wages, which is also affecting the industry.

The foreclosure crisis, the stock market swing and the funds crunch are all to blame, according to Shailendra Sing of Percept Picture Company that has hits like Jannat and Hauman to its credit. The film industry in Mumbai runs on upfront payments at all levels. With foreclosure crisis hitting the funds, the industry is crumbling like a ton of bricks, opines Singh.

One of the first big-ticket films to suffer is Subhash Ghai’s musical Yuvvraaj starring Katrina Kaif and Salman Khan. Eros International withdrew from distributing the film following the foreclosure crisis. The distribution rights were being offered to Shri Ashtavinayak Cine Vision presumably for Rs. 30 crores. The deal has apparently run into troubled waters, said Nagrath. According to an official of Ashtavinayak, their offer was Rs. 18 crore. Under normal circumstances, this film would have commanded atleast Rs. 45 to Rs. 50 crores.

Both Eros International and Adlabs are not going in for any new projects. The share prices of Adlabs have fallen in the aftermath of the foreclosure crisis from Rs. 1500 to Rs. 200.

UTV, Studio 18, Pritish Nandy Communications and other corporate producers are also rethinking their projects. Akshay Kumar was reportedly offered Rs. 71 crore for a film by UTV Motion Pictures. However, in the changed circumstances, the actor has apparently been asked to take a lower fee. Apparently he has not responded to the revised offer as yet. According to an UTV official, the project may be put on the backburner. Similarly, London Dreams, which was supposed to start Salman Khan and Ajay Devgan, has also been dropped by Studio 18 due to lack of funds as has been a Red Chillies project with Anubhav Sinha.

Bank Foreclosures by Top States

The Foreclosure Crisis Has Made Families Moving In Together

Posted on February 10th, 2009 in Foreclosure Crisis | No Comments »

What love couldn’t do, foreclosure is doing today – it is making many families move in together to battle the foreclosure crisis. It is a tendency that is picking up. Each family has a story to tell – all related to the tough foreclosure times.

In 2008 Kanessa Tixi’s father had completed constructeing a three family unit when he lost his job in February. It posed a big question about paying $5,000 per month towards mortgage for this new house in Queens, New York. His children, some being step siblings, decided to help by moving in. The father shifted to the first floor while the other siblings partitioned the house amicably amongst themselves. Thus family members became roommates and banded together as long term tenants of their father. This helped him to pay the mortgage.

Tixie is very upbeat about this arrangement that is still working during these tough days She said, “It’s been very beneficial that we’re all together. My stepbrother and I have a wonderful relationship now. We eat together for dinner, and I’ve become close to my dad too. This is an important time for family to help, the way the housing market is going. Our story is a testament to how families should come together to help with a mortgage.”

The negative side of the economy – flood of foreclosures, depressing property values, vanishing equity on properties and mounting unemployment is having a positive impact on the social picture. It is pulling relations together to pool their resources and help one another so as to avoid the loss of homes. Siblings are joining hands to help clear mortgage dues. Many of those who have already lost their houses to foreclosure are moving in with their parents for the sake of sheer survival and warmth. Even warring spouses have kept on hold their war and living under the same roof because for the simple reason that the house cannot be sold.

Often those who do lose their houses have nowhere to go. Many survive from one pay cheque day to another. Most of the local and state homeless associations have seen a rise in homelessness since foreclosures surfaced in 2007. About 76% who got marching orders from the foreclosure crisis moved in with families and friends. Foreclosure postings crossed 3 million in 2008 according to latest reports from RealtyTrac. The good side is that people are coming closer together in the face of the common enemy.

New York Bank Foreclosures by Top Counties

There Is a Strong Belief that the Economy Can be Saved from the Foreclosure Related Crisis by Saving Bankers

Posted on February 9th, 2009 in Foreclosure Crisis | No Comments »

There is a strong running belief that the economy of the country and the world can be saved form the foreclosure related crisis by saving the bankers. But President Obama did not understand this when he attacked Citi’s demand for a new jet. He did not understand that without a jet how could the executives attend the Davos conference? The President’s criticism of the banking lobby understates his little understanding of what is good for the ordinary people.

The much-hyped meeting in the Olympian heights of the magic mountains of Switzerland is based on the strong belief that the banks must be remunerated for their efforts to save the world.

The membership fee to the World Economic Forum is about $37,000 annually and a ticket to the party requires another $16,000. A private meeting with any leaders of the industry is more than $220,000 according to news leaking in. Co-chairs of the conference like Rupert Murdoch has to give $435,000 for the honour.

The money is not only for wining, dining and skiing but it also pays for the coming of less paid luminaries like the heads nations – its presidents and prime ministers. Last year the meeting produced some quotable quotes of ideas like “collaborative innovation” tackling “the many challenges emerging as a result of shifting power equations in the world”. Names like Bill Gates and Bono promised to make 2008 “a turning point in the fight against poverty.” Tony Blair will be remembered for his famous words, “ If we are interconnected and the world is interconnected, the only way for the world to work is to have a set of common values. We have no option but to work together.” Today the world has reached a turning point and the nations are pulling the cart as one horse.

This year the agenda for the Davos club is to chalk out “the values and leadership principles for a post-crisis world”. There were a plethora of suggestions about how to mitigate the bloodbath of bad lending sans regulation and transparency. Morgan Chase representative Jamie Dimon made the invaluable suggestion to the leaders of America to “get all the right people in the room and close the door and put a solution up on the wall.” Stephen Schwarzman of Blackstone Group had a better idea – the governments should get out of the way and banks be allowed to slash the amount that is kept as reserve against losses. This money should circulate as lending!

Bank Foreclosures by Top States

The Foreclosure Crisis Has Caused the Minority Ownership Rate of Houses to Fall

Posted on February 4th, 2009 in Foreclosure Crisis | No Comments »

It is the Hispanics and the Blacks that have been worst hit by the ongoing recession. The foreclosure crisis has caused the ownership rate of the minorities to fall the most in comparison to the Whites. Others suffering unfavourably are single parents and elders. More than a third of them are burdened with heavy mortgages. In America inequality has drawn traditional lines based on race, age and education. This gap has been widened by the ongoing crisis as is illustrated by the data and analysis of Associated Press based on the findings of Census Bureau 2007.

Since 1990 the minorities had made notable gains in assets and house ownership. But today “things are going into reverse gear.” The house ownership rates of the Latinos and Blacks are rapidly falling said Edward Wolff an economist from New York University whose field of work involves studying the distribution of income and wealth.

About 9.5 million families, calculating to 1:5 of 52 million house owners having mortgage,s pay out 38% of their income (pre-tax) on mortgage repayment, house tax and insurance. This group will benefit from the loan help programmes that have been launched by Fannie Mae and Freddie Mac. The latter two mortgage giants are now under the control of the government.

The worst foreclosure hit states are California, Florida and Nevada. But in each state there are pockets of foreclosure concentration. Unexpected expenses like illness or repair bills for a damaged car may suddenly hit people. Immediately the foreclosure clock starts ticking.

The foreclosure crisis is not hitting people evenly but it is concentrating on geographic zones and demographic divisions. The situation is going from bad to worse with 10% of all mortgage holders in the country defaulting for at least a month. In the previous year of 2007 it was 7.5%, while in 2006 it was 6%. The minorities are bearing the brunt of the attack.

Nearly a third of the Latinos pay out 38% of their earnings on expenses related to housing in comparison to a quarter of the Asians and Blacks. Amongst the Whites it is 16%.

Many of the Latinos ended up with sub-prime mortgages because they did not have bank accounts and their earnings were mostly in cash, according to Janis Bowdler, Associate Director for Wealth Building at National Council of La Raza, Washington.

Bank Foreclosures by Top States

Foreclosure Crisis Has Led To Falling Prices

Posted on January 14th, 2009 in Foreclosure Crisis | No Comments »

Foreclosure crisis has led to falling prices but that does not necessarily mean deflation has started. Monica Yearwood has been closely following the drop in prices and holding her shopping back until nearly all the shops in the mall had put up a sale poster. The discount average was 60%.

The foreclosure crisis set off a chain reaction at home and abroad. With less people in America using gas the price fell to nearly $35 per barrel. Mortgage prices and real prices too tumbled. Even food prices dropped – this being a rare occurrence.

Immediately people began to fear the setting in of deflation. Prices falling in the mall are fun, but deflation causing a long period of supply of money shrinking in the market, is spoken of in hushed tones with fear by the pundits of economy. If the prices fell at an even pace for a long time the ordinary shopper as well as those investing in big stuff would not move until prices fell even lower. Thus wage earners would see pay cuts but their debts would remain the same. This would lead to more defaults and foreclosures. The workers would lack the incentive to make money In brief the economy would fall flat. It happened in the West in 1929 to 1933. Japan faced it during the 90’s. It has mauled a whole generation.

It cannot be avoided that some of the signs are showing up. Firms are taking away retirement and health benefits. Millions are getting unemployed. In shops, the pants that were once priced at $49 were being sold for $15 and cashmere sweaters going for $59.99 when the original price was $150. But despite these signs the economists are telling us that the country is not entering a bout of deflation.

Economist Joel Naroff of Holland said, “What we’re seeing right now is that two bubbles are bursting at the same time.” Those two are the bubbles of housing and energy. The bursting of these two is pulling down prices since the last few months. He explains that it is not deflation but a period of discounts. The point is whether this will continue. On the positive side is that the federal government is not sitting back but pouring money to kick up sales. The final answer will be got in 2009. Right now during the holiday season discounts had to be offered to shore up sales but with regained confidence the markets will once more recover.

Bank Foreclosures by Top States

To Foreclosure Victims Judge Ralph D. Gants Is a Hero

Posted on January 13th, 2009 in Foreclosure Crisis | No Comments »

To foreclosure victims Superior Court Judge Ralph D. Gants is a hero – and rightly so. His rulings had prevented the routine foreclosures by the sub-prime lenders. The fears of the residents of Roxbury were allayed when he enforced more scrutiny by the state regarding the plans of Boston University of setting up a biolab in the locality. In many instances he had ordered the setting free of sexual offenders who had run through their term, arguing that they could not be jailed indefinitely. Gants had also pulled up the police force for loose cases and for lying.

A native of Lexington, Gants has been at the bench of eleven years. At 54 years of age he has won a name for himself for being intelligent as well as impartial who has never been overpowered by public opinion. He gives equal time to cases against defendants who are indigent and those involving heavy weight. This is the opinion of the legal fraternity who have worked with him – lawyers and his colleagues.

District Judge Richard G. Stearns has known Gants since 1980’s. He was full of praise for him and said, “He is not attempting to play to the crowd or public passion. He is trying to apply the law.” His firm rulings have rankled the prosecutors.

He belongs to a working middle-class family of Mamaroneck, Westchester County New York. He graduated from Harvard College and Harvard Law College and worked with FBI Director Webster for two years before joining the office of USA attorney in 1983. Attorney Mark Robinson commented, “He saw different abuses and developed an appropriate level of cynicism that even people in trusted positions are capable of doing bad things”. He pursued followed corruption cases leveled against police personnel and politicians. His standards were described as “ferocious”. Gants has been described as a “quiet dignified person with a hidden sense of humor.”

His landmark ruling against foreclosure has benefited nearly 2,200 house owners in Massachusetts. Gants ordered a ruling that stopped the sub-prime lender from going ahead with foreclosure on some loans that were structurally unfair. The matter was kept in abeyance until the state officials reviewed each one. The ruling was ordered against Fremont Investment & Loan of California. It has recently been upheld by SJC. It was contended that the lending laws of the state were violated by predating on borrowers with unfair mortgages.

New York Bank Foreclosures by Top Counties

The Foreclosure Related Mortgage Crisis Is Much Worse Than What Had Been Predicted 

Posted on January 6th, 2009 in Foreclosure Crisis | 1 Comment »

Nevada has swiftly slid down from a booming town to a gloomy town on the verge of economic catastrophe. The federal measures have done little to mitigate the woes of Nevada and bring back health to the economy. The state banking commissioner said, “Our economy has gone from the fastest growing in the nation to amongst the worst.” He was speaking at a conference comprising of both political parties as well as banking and housing experts. It had been set up to review the use of bailout funds of $700 billion. It was the first of its kind outside Washington held a week after a five-member panel raised the question about how effective the bailout programme had been and why it lacked transparency.

Nevada has been one of the worst hit foreclosure states in the country. Damon Silvers, the associate general counsel for AFL-CIO said, “We need to know how the Wall Street bailout looks from here. Has it worked?” Everybody unanimously gave a loud negative reply. Rep. Shelley Berkley (Democrat) admitted there was no visible impact in Nevada.

The bailout money injected into the economy has not helped the small local banks. The latter has a big role to play as regards lending out money commented Bill Uffelman representing Nevada Bankers Association. He criticized the programme for not having proper guidelines regarding eligibility and complained that the smaller bodies were not getting sufficient help timely. It was their failure that had kick started federal action. He cryptically remarked, “It seems to be a matter of too big to fail versus too small to matter.”

The spokeswoman of Nevada Fair Housing Center, Gail Burks said her organization gets about 600 calls each day from house owners who are desperate to avoid foreclosure. She said that generally a loan workout out eats up 200 ours of staff-time. She opined that the modifications should be more streamlined and it should be a must that those lenders who are taking federal help should modify loans.

Senator Harry Reid spoke to reporters after the session. He said that he voted for compulsory modifications. He also supported the idea of imposing a moratorium of 90 days for foreclosures so as to give the borrowers some time to breathe and work out viable escape routes. With strong views being projected about the use of the first half of the $700 bailout money it is doubtful if the second half will be released until President-Obama assumes office.

Nevada Bank Foreclosures by Top Counties

Senior Citizens Are the Latest Victims to the Foreclosure Crisis

Posted on December 23rd, 2008 in Foreclosure Crisis | 1 Comment »

The foreclosure crisis is having a huge impact on society- families are broken apart, pets are abandoned, vandalism increases to a high rate etc. The senior citizens are the latest victims to the foreclosure crisis. They have to go to the extent of delaying their retirement age. These people are choosing the option of going back to their jobs to keep up with their mortgage payments and crashing investments.

Over half of the senior citizens have voiced their choice of delaying their retirement. They are even planning to rejoin their old jobs to cope with the economic meltdown. This is according to a report released by Golden Gateway Financial on Tuesday. According to a recent poll which was conducted on 800 homeowners above the age of sixty five, about 31 percent said that they would continue doing their job to pay for all their bills since their retirement funds are falling. Another 22 percent who have already retired are going to return to their jobs.

Eric Bachman, founder and CEO of Golden Gateway said, “Older Americans are aggressively searching for ways to gain control over and offset losses that might be near to impossible to recover in their lifetimes.” He added, “This is a generation that has seen and heard it all, and now we are asking them to find new answers to seemingly crippling situations.”

The elderly citizens who are on the hunt for a job may have some difficulty in finding one. To add to their problems, most employers are shedding a lot of jobs. They are doing this much more this year than they have ever done in 1974. Besides, these aged employees do not have the latest skills, which these rare companies offering some jobs, are looking for. Dean Baker is the director of the Centre for Economic and Policy Research. He said, “A lot of people target a certain amount of money for their retirement and if 30% of that disappears, they’ll have to continue working.”

Bachman correctly says, “We have years to bounce back.” The most difficult part for most of these people looking for jobs is that they did not have enough time to offset the losses they have suffered in their investments. He added, “Seniors don’t.”

Senior citizens are considering it an option to liquefy their hard assets, for money after retirement.

Bank Foreclosures by Top States

Conference Called By The Financial Strategists To Tackle Foreclosure Related Crisis

Posted on December 22nd, 2008 in Foreclosure Crisis | No Comments »

A conference was called by the financial strategists to tackle foreclosure related crisis. The target was to deliberate upon the rescue plans for the financial sharks like City Group, the Chairwoman of F.D.I.C., Sheila C. Bair voiced her concern. She vouched her support to help the bank only on the condition that city Group has to participate in the prevention of foreclosures. She was supporting the cause from her place at Capitol Hill and after a prolonged discussion she elicited a positive response. This meeting was a much needed one, the likes of which, rarely took place.

Mrs. Bair has distinctly expressed that the dollars earned from the taxpayers could be used to modify the loans that could not be paid by the borrowers. This proposal has not been taken well by the white house and the other concerned organizations. This is why the resulting measures taken to curb foreclosures have been ineffective so far. The present situation hints that about 10 million property owners are to fall prey to foreclosure in the next five years.

The government and the Treasury executives look upon the cause championed by Mrs. Blair as an attempt to project herself in public while making them seem insensitive. Her participation is not called for when deliberating over foreclosures, though she still remains very actively fighting the cause of seizure. Out of sixty five thousand Mrs. Blair wanted to help, just about seven thousand two hundred have enjoyed relief. Not just her, even the Congress in its effort to help people landed up with problems. Till date just about two hundred loaners have applied for the aid and the modification of loans still remain a proposal.

Medical expenditure is one of the prime reasons for failure in loan payments. Such families could still manage to pay their dues on time provided the interest was reduced. Perplexed at the regular aid given to the banks they remain unfortunate victims of foreclosure.

The Treasury feels that FDIC’S assessment of 24b $, to rescue the people from foreclosures, is erroneous and that it would definitely go up to 70b$. They have pointed out that, the fact that reduced rate of interest would have defaulters, were not taken into account.

The Congress and the F.D.I.C. has come under severe fire, since their measures have proved to be lopsided. It is increasingly difficult to distinguish between genuine loaners and the ones dishonestly looking for a modification, though they can easily afford the payment.

Bank Foreclosures by Top States

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