Feb
24
How would the bailout plan not being passed affect company’s payroll as the news is reporting?
Filed Under bailout | 7 Comments
Jesse P asked:
I really don’t see why my employer would not be able to pay me because of the lack of a bailout, but all I’ve heard on the news today is that employers might not be able to pay employees and I might not be able to take money out when I got to the ATM. WHY? No reporter has backed up their statments with facts! Just tell me why, I want to know if it’s correct!
Chad
I really don’t see why my employer would not be able to pay me because of the lack of a bailout, but all I’ve heard on the news today is that employers might not be able to pay employees and I might not be able to take money out when I got to the ATM. WHY? No reporter has backed up their statments with facts! Just tell me why, I want to know if it’s correct!
Chad
Feb
22
Could the 700 Billion Bailout = No Change in the Housing Market?
Filed Under bailout | Comments Off
Ki Gray asked:
The general arguments concerning the bailout have gone something along the lines of
Anti Bailout : “The taxpayers should not have to foot a 700 billion dollar bill to bail out Wall Street”
Pro Bailout : “But if taxpayers do not bail out Wall Street the economy will fall apart and those same taxpayers will be hurt”
If we could be sure the bailout would work the second argument has some merit. While the bailout will certainly help the banks, the problem is we have almost no guarantee the bailout will help the real estate market and the general economy.
First let’s look at some recent history of how the Fed has tried to help the troubled real estate market. The Fed usually attempts to lower mortgage interest rates to help the real estate market. By lowering mortgage rates houses become more attractive to buyers. In addition, with lower mortgage rates home buyers can buy more expensive houses with the same monthly payment. Therefore lower rates can help stop falling home prices. So it was not surprising in early 2008 the Fed cut the Fed rate. In normal markets lowering the Fed rate helps banks and causes them to lower mortgage interest rates. And following the Fed cut mortgage rates dropped to 5.5 for a period of time. If they had stayed down we might have averted some of the problems with the current housing crisis. But instead a few weeks later rates had jumped backed up to 6.2. Basically banks said thanks for the lower fed rates but we are not going to alter our mortgage rates.
In fact, over the next few months mortgage rates rose all the way to 6.6. The next big move was acquiring Freddie Mac and Fannie Mae. This was one of the largest government takeovers in US history. The move was risky because the government was providing insurance for trillions in loans. And it initially had a positive effect on the housing market. But a few weeks later AIG ran into financial problems. This dominated the news cycle. It was almost as if the government takeover of Freddie Mac and Fannie Mae never happened.
So the previous moves the federal government has made to stop the financial crisis have not worked. Should the 700 billion dollar bailout be different? It could certainly help the housing markets. But it might not. Lets look at why.
One of the benefits of the 700 billion dollar bailout has nothing to do with banks. It has more to do with perception on Main Street. The hope is that the bailout will restore confidence in the real estate market on Main Street.
In politics people often talk about news cycles covering up the last news cycle. Basically the last piece of news stays in people’s minds until the next piece of news comes along. The Fannie Mae and Freddie Mac news cycle (and the billions the government will spend on it) only lasted until the next piece of news, which was about a week. While the 700 billion dollar bailout should restore some confidence in the real estate market, that confidence might only last until the next piece of news. And with things happening so quickly that news cycle might not last very long and given the current market the next piece of news will probably be negative.
The other benefit of the 700 billion dollar bailout is that the government is hoping to influence banks to start lending again. The idea is that by taking billions in toxic loans off the books for banks they will start lending again. The problem is that their is no guarantee this will happen. In fact, when the Fed lowered rates banks said thanks but decided that prospects for the housing market looked negative and continued to add restrictions to lending. In a similar fashion banks could say thanks for the 700 billion but we continue to see negative prospects in the housing market and therefore we will continue to have strict lending practices. But thanks for the 700 billion taxpayers.
Jeanette
The general arguments concerning the bailout have gone something along the lines of
Anti Bailout : “The taxpayers should not have to foot a 700 billion dollar bill to bail out Wall Street”
Pro Bailout : “But if taxpayers do not bail out Wall Street the economy will fall apart and those same taxpayers will be hurt”
If we could be sure the bailout would work the second argument has some merit. While the bailout will certainly help the banks, the problem is we have almost no guarantee the bailout will help the real estate market and the general economy.
First let’s look at some recent history of how the Fed has tried to help the troubled real estate market. The Fed usually attempts to lower mortgage interest rates to help the real estate market. By lowering mortgage rates houses become more attractive to buyers. In addition, with lower mortgage rates home buyers can buy more expensive houses with the same monthly payment. Therefore lower rates can help stop falling home prices. So it was not surprising in early 2008 the Fed cut the Fed rate. In normal markets lowering the Fed rate helps banks and causes them to lower mortgage interest rates. And following the Fed cut mortgage rates dropped to 5.5 for a period of time. If they had stayed down we might have averted some of the problems with the current housing crisis. But instead a few weeks later rates had jumped backed up to 6.2. Basically banks said thanks for the lower fed rates but we are not going to alter our mortgage rates.
In fact, over the next few months mortgage rates rose all the way to 6.6. The next big move was acquiring Freddie Mac and Fannie Mae. This was one of the largest government takeovers in US history. The move was risky because the government was providing insurance for trillions in loans. And it initially had a positive effect on the housing market. But a few weeks later AIG ran into financial problems. This dominated the news cycle. It was almost as if the government takeover of Freddie Mac and Fannie Mae never happened.
So the previous moves the federal government has made to stop the financial crisis have not worked. Should the 700 billion dollar bailout be different? It could certainly help the housing markets. But it might not. Lets look at why.
One of the benefits of the 700 billion dollar bailout has nothing to do with banks. It has more to do with perception on Main Street. The hope is that the bailout will restore confidence in the real estate market on Main Street.
In politics people often talk about news cycles covering up the last news cycle. Basically the last piece of news stays in people’s minds until the next piece of news comes along. The Fannie Mae and Freddie Mac news cycle (and the billions the government will spend on it) only lasted until the next piece of news, which was about a week. While the 700 billion dollar bailout should restore some confidence in the real estate market, that confidence might only last until the next piece of news. And with things happening so quickly that news cycle might not last very long and given the current market the next piece of news will probably be negative.
The other benefit of the 700 billion dollar bailout is that the government is hoping to influence banks to start lending again. The idea is that by taking billions in toxic loans off the books for banks they will start lending again. The problem is that their is no guarantee this will happen. In fact, when the Fed lowered rates banks said thanks but decided that prospects for the housing market looked negative and continued to add restrictions to lending. In a similar fashion banks could say thanks for the 700 billion but we continue to see negative prospects in the housing market and therefore we will continue to have strict lending practices. But thanks for the 700 billion taxpayers.
Jeanette
Feb
19
Have You Heard About the Small Business Bailout Program
Filed Under bailout | Comments Off
Darron Roberson asked:
mall Business Bailout Program
The Entrepreneurial Bailout
Most small business owners are accustomed to hard work, sacrifices, ingenuity, and last but not least building loyal repeat customers to survive. To make it during tough economics times entrepreneurs will need to continue to rely on their creativity to attract new customers, and keep their current customers returning. Entrepreneurs can not afford to hold their breathe waiting for the government help.
"Entrepreneurs can not afford to hold their breathe waiting for the government help"
Create Your Own Bailout Plan
If you own a business that is reliant on local customers (the majority of your sales are to people that live or work within 10 miles of your location), then you must carefully use any precious financial resources you have to let your current customers know you appreciate them, identify new prospects and implement a plan that will enable you to:
Identify New Customers
Communicate Effectively
Track Dollars Spent
Build Ongoing Relationships
Fortunately today the small business owner has tools that where not available in times past. Technology has made it affordable, and realistic for the small business owner to identify, target, track, and build an on going relationship with it’s primary customer demographic. The Internet can play a big part in helping small businesses connect with their target customers. It’s affordable, used by millions of people everyday to locate information on goods and services, inherently trackable and produces important measurable data.
The Magic Pill
The Internet alone is not the magic pill for the problems ailing small business. I believe the Internet can make any marketing dollars spent more effective and valuable in many ways. The cost of having a proper web presences can be less than the cost of a years supply of business cards. The information that can be delivered and received online is drastically less expensive, can be extremely more informative, and may ultimately reach more people than a television ad or print campaign alone.
How to Multiply Your Money
If you combine the right Internet strategy with your other marketing efforts it can multiply the effectiveness of your campaign many times over. When you use the wrong Internet strategy or no strategy at all the Internet will be just as in-effective as any other misguided marketing.
When someone can view your print or television advertisement, and then go to your website, voluntarily give you permission to start a relationship with them, view a video on your products, services, special offers at their leisure, and then help you market to others by sending information to family, friends and co-workers and have them to perhaps do the same that’s when your marketing efforts and dollars start to really multiply your return on investment.
Eleanor
mall Business Bailout Program
The Entrepreneurial Bailout
Most small business owners are accustomed to hard work, sacrifices, ingenuity, and last but not least building loyal repeat customers to survive. To make it during tough economics times entrepreneurs will need to continue to rely on their creativity to attract new customers, and keep their current customers returning. Entrepreneurs can not afford to hold their breathe waiting for the government help.
"Entrepreneurs can not afford to hold their breathe waiting for the government help"
Create Your Own Bailout Plan
If you own a business that is reliant on local customers (the majority of your sales are to people that live or work within 10 miles of your location), then you must carefully use any precious financial resources you have to let your current customers know you appreciate them, identify new prospects and implement a plan that will enable you to:
Identify New Customers
Communicate Effectively
Track Dollars Spent
Build Ongoing Relationships
Fortunately today the small business owner has tools that where not available in times past. Technology has made it affordable, and realistic for the small business owner to identify, target, track, and build an on going relationship with it’s primary customer demographic. The Internet can play a big part in helping small businesses connect with their target customers. It’s affordable, used by millions of people everyday to locate information on goods and services, inherently trackable and produces important measurable data.
The Magic Pill
The Internet alone is not the magic pill for the problems ailing small business. I believe the Internet can make any marketing dollars spent more effective and valuable in many ways. The cost of having a proper web presences can be less than the cost of a years supply of business cards. The information that can be delivered and received online is drastically less expensive, can be extremely more informative, and may ultimately reach more people than a television ad or print campaign alone.
How to Multiply Your Money
If you combine the right Internet strategy with your other marketing efforts it can multiply the effectiveness of your campaign many times over. When you use the wrong Internet strategy or no strategy at all the Internet will be just as in-effective as any other misguided marketing.
When someone can view your print or television advertisement, and then go to your website, voluntarily give you permission to start a relationship with them, view a video on your products, services, special offers at their leisure, and then help you market to others by sending information to family, friends and co-workers and have them to perhaps do the same that’s when your marketing efforts and dollars start to really multiply your return on investment.
Eleanor
Feb
19
The 2009 Bank Bailout Plan | How Will It Help You Avaoid Foreclosure ?
Filed Under bailout | Comments Off
Loan Modification Attorney asked:
A new Bank Bailout Plan unveiled last week may give new hope to distressed homeowners and communities. Treasury Secretary Tim Geithner recently announced the government’s plan to commit over $1 trillion in reforms aimed at rescuing the country’s financial system. The program would amend weaknesses in the bailout plan proposed by the Bush administration, and override other previous reforms.
Much of the funding would go into financing loan purchases and reviving the economy through increased lending activity. The key points of the program include:
Support for bank lending
The Treasury aims to advance the capital position of major banks to boost lending activity. This would entail a three-part process:
“Stress test”: Banks and financial institutions will be checked to ensure they have enough capital to keep lending, and whether they can survive future economic downturns. The government will tighten its rules on public disclosure of a bank’s holdings, and those with assets over $100 billion will be assessed individually.
“Capital Assistance Program”: The CAP will build on previous efforts by theTroubled Asset Relief Program (TARP), which has put $250 billion in capital purchases. The Treasury will continue to help banks rebuild their capital following the stress test, and take preferred shares in banks taking part in the CAP program. According to Geithner, this will serve as a buffer for banks that can benefit from increased lending.
“Financial Stability Trust”: The FST is a separate trust to hold the investments made by the Treasury under the program, and will be maintained by a group of fund managers.
Buying up troubled assets
This section is designed to help relieve banks of “toxic” or hard-to-sell assets and put more of their efforts into private lending. The goal is to buy up these assets using a combination of public funds and private capital, with the private sector taking charge of the price assessments. The costs of this goal are still uncertain, but the Treasury expects to generate up to $1 trillion from the investments.
Consumer and business lending
The Treasury also plans to restore the flow of credit by increasing lending in the consumer and business levels. This goal builds on the proposed Term Asset-Backed Securities Loan Facility (TALF), but will increase funding from $200 billion to $1 trillion in federal lending. Under the plan, the government will purchase securities backed by consumer and business loans, such as auto loans, small business loans and credit cards. The plan will put a premium on higher-quality securities to minimize losses for taxpayers.
Improved transparency and accountability
Banks and financial institutions who benefit from taxpayers’ money will be closely watched to ensure they don’t misuse public funds. Any companies receiving bailout funds will have to meet new requirements and operate under tighter restrictions. For instance, they will need to submit a plan for spending the government aid to increase lending, and upload monthly reports on the website www.financialstability.gov. Details of all transactions will also be posted on the website 5-10 days after each one is completed.
Companies receiving federal loans will also have to limit dividends to 1% per quarter until the debt is paid. Until then, they cannot re-buy private shares or buy up other banks without consent from the Treasury. A cap will also be imposed on executive pay for CEOs, and lobbyists will be banned to keep them from influencing the Treasury’s decisions.
Housing and foreclosure assistance
The new plan will lower interest rates to provide more affordable housing and reduce the risk of foreclosure. This program will cost $50 billion in the first weeks following implementation, during which loan modification guidelines will be established and existing programs will be adjusted. Under this plan, all companies receiving financial assistance will need to participate in the foreclosure mitigation plan (currently, only Citigroup and the Bank of America are taking part).
For homeowners, the government plans to spend $600 billion to buy up existing mortgage-backed securities from Fannie Mae and Freddie Mac. This will allow them to lower mortgage rates and make housing more affordable for families in distressed communities.
Small business lending
Small businesses and community lenders will also benefit from the bailout plan through lower borrowing costs and increased lending activity. Key elements will include buying up loans from the Small Business Administration (SBA), reducing fees, and increasing loan guarantees up to 90%.
Loan modification options
The new bailout plan may offer new options to homeowners seeking Loan Modification and other forms of mortgage assistance. Luckily, most loan modification companies have adjusted their programs to better comply with public policies. To know more about your options under this bailout plan, visit : http://www.cdloanmod.com/loss-mitigation-news
Herbert
A new Bank Bailout Plan unveiled last week may give new hope to distressed homeowners and communities. Treasury Secretary Tim Geithner recently announced the government’s plan to commit over $1 trillion in reforms aimed at rescuing the country’s financial system. The program would amend weaknesses in the bailout plan proposed by the Bush administration, and override other previous reforms.
Much of the funding would go into financing loan purchases and reviving the economy through increased lending activity. The key points of the program include:
Support for bank lending
The Treasury aims to advance the capital position of major banks to boost lending activity. This would entail a three-part process:
“Stress test”: Banks and financial institutions will be checked to ensure they have enough capital to keep lending, and whether they can survive future economic downturns. The government will tighten its rules on public disclosure of a bank’s holdings, and those with assets over $100 billion will be assessed individually.
“Capital Assistance Program”: The CAP will build on previous efforts by theTroubled Asset Relief Program (TARP), which has put $250 billion in capital purchases. The Treasury will continue to help banks rebuild their capital following the stress test, and take preferred shares in banks taking part in the CAP program. According to Geithner, this will serve as a buffer for banks that can benefit from increased lending.
“Financial Stability Trust”: The FST is a separate trust to hold the investments made by the Treasury under the program, and will be maintained by a group of fund managers.
Buying up troubled assets
This section is designed to help relieve banks of “toxic” or hard-to-sell assets and put more of their efforts into private lending. The goal is to buy up these assets using a combination of public funds and private capital, with the private sector taking charge of the price assessments. The costs of this goal are still uncertain, but the Treasury expects to generate up to $1 trillion from the investments.
Consumer and business lending
The Treasury also plans to restore the flow of credit by increasing lending in the consumer and business levels. This goal builds on the proposed Term Asset-Backed Securities Loan Facility (TALF), but will increase funding from $200 billion to $1 trillion in federal lending. Under the plan, the government will purchase securities backed by consumer and business loans, such as auto loans, small business loans and credit cards. The plan will put a premium on higher-quality securities to minimize losses for taxpayers.
Improved transparency and accountability
Banks and financial institutions who benefit from taxpayers’ money will be closely watched to ensure they don’t misuse public funds. Any companies receiving bailout funds will have to meet new requirements and operate under tighter restrictions. For instance, they will need to submit a plan for spending the government aid to increase lending, and upload monthly reports on the website www.financialstability.gov. Details of all transactions will also be posted on the website 5-10 days after each one is completed.
Companies receiving federal loans will also have to limit dividends to 1% per quarter until the debt is paid. Until then, they cannot re-buy private shares or buy up other banks without consent from the Treasury. A cap will also be imposed on executive pay for CEOs, and lobbyists will be banned to keep them from influencing the Treasury’s decisions.
Housing and foreclosure assistance
The new plan will lower interest rates to provide more affordable housing and reduce the risk of foreclosure. This program will cost $50 billion in the first weeks following implementation, during which loan modification guidelines will be established and existing programs will be adjusted. Under this plan, all companies receiving financial assistance will need to participate in the foreclosure mitigation plan (currently, only Citigroup and the Bank of America are taking part).
For homeowners, the government plans to spend $600 billion to buy up existing mortgage-backed securities from Fannie Mae and Freddie Mac. This will allow them to lower mortgage rates and make housing more affordable for families in distressed communities.
Small business lending
Small businesses and community lenders will also benefit from the bailout plan through lower borrowing costs and increased lending activity. Key elements will include buying up loans from the Small Business Administration (SBA), reducing fees, and increasing loan guarantees up to 90%.
Loan modification options
The new bailout plan may offer new options to homeowners seeking Loan Modification and other forms of mortgage assistance. Luckily, most loan modification companies have adjusted their programs to better comply with public policies. To know more about your options under this bailout plan, visit : http://www.cdloanmod.com/loss-mitigation-news
Herbert
Feb
17
How does a government bailout work for major corporations? Where are the $700 Billion dollars coming from?
Filed Under bailout | 2 Comments
NanaGee asked:
So I understand what money is and where it comes from, now I just want to understand how a government bailout works for major corporations. Is this money simply printed and being brought out of thin air to be later paid off by taxpayers? I want to know in what ways will bailing out a major corporation benefit anyone besides the corporation itself.
Cecil
So I understand what money is and where it comes from, now I just want to understand how a government bailout works for major corporations. Is this money simply printed and being brought out of thin air to be later paid off by taxpayers? I want to know in what ways will bailing out a major corporation benefit anyone besides the corporation itself.
Cecil
Feb
7
A Confident State Bailout
Filed Under bailout | Comments Off
John Parks asked:
As we move deeper into our financial adjustment period known as a recession, the word that is on the tip of every state’s tongue is Bailout. State Bailout is becoming the chant heard around the country. There’s just not enough money to keep state government operating in a positive cash flow mode and keep all the state funded programs running as they have been budgeted to function. It seems we collectively have the notion that the way we have been doing business is going to continue expanding endlessly, even though our thoughts about it are rooted in fear. Money and the lack or abundance of it, takes precedence over everything else, and in a time of lack we turn to the federal government to bail us out of our own sinking ship.
The issue is not whether the state bailout is right or wrong, it’s just a wakeup call. The message that is being broadcast from the need for a bailout is that reality is changing. Antiquated thoughts about the systems we established are being tossed in a pile marked not acceptable and should be re-thought using the tools we innately carry with us at all times; the simple tools of honestly, compassion and truth. Health care, education, human services and the plethora of other services provided by state funding no longer serve the good of the people who pay for them. The foundation of our economy is shifting and we are the ones who are instigating the shift and developing a new foundation. Confidence in state and the federal government in general has been buried in the rubble of greed and selfishness. The call for a state bailout is a drowning system crying for a lifejacket when the water is less than a foot deep. Every state has a built-in system to create a bailout and it’s called the confidence of the people.
Confidence is the off spring off example. A good state government should be concerned with sufficient food, shelter and the confidence of the people. The elected officials can be the catalyst for a state bailout by governing with honesty, compassion and truth. When those moral characteristics are practiced, abundance follows. Confidence is not something demanded but must be allowed to grow spontaneously. Confidence creates prosperity, which is the natural way to implement a state bailout.
The real issue is not just a state bailout; it reaches the federal level as well. We all looked to the federal government to bailout us out of this self-created mess, but government in all forms needs a bailout. The bailout solution is to lead the people by governing with honesty, compassion and truth. Confidence will be the product and prosperity will follow. That is the real message that is echoing off the walls of our democracy. The state bailout is just one piece of a bigger pie that is being cut up and distributed nationwide so everyone can taste it and choose their homemade pie of honesty, compassion and truth and experience the sweetness of abundance. That’s how we began this journey and that’s the confident way to live it.
For more information on state bailouts, visit http://www.statebailouts.com.
Douglas
As we move deeper into our financial adjustment period known as a recession, the word that is on the tip of every state’s tongue is Bailout. State Bailout is becoming the chant heard around the country. There’s just not enough money to keep state government operating in a positive cash flow mode and keep all the state funded programs running as they have been budgeted to function. It seems we collectively have the notion that the way we have been doing business is going to continue expanding endlessly, even though our thoughts about it are rooted in fear. Money and the lack or abundance of it, takes precedence over everything else, and in a time of lack we turn to the federal government to bail us out of our own sinking ship.
The issue is not whether the state bailout is right or wrong, it’s just a wakeup call. The message that is being broadcast from the need for a bailout is that reality is changing. Antiquated thoughts about the systems we established are being tossed in a pile marked not acceptable and should be re-thought using the tools we innately carry with us at all times; the simple tools of honestly, compassion and truth. Health care, education, human services and the plethora of other services provided by state funding no longer serve the good of the people who pay for them. The foundation of our economy is shifting and we are the ones who are instigating the shift and developing a new foundation. Confidence in state and the federal government in general has been buried in the rubble of greed and selfishness. The call for a state bailout is a drowning system crying for a lifejacket when the water is less than a foot deep. Every state has a built-in system to create a bailout and it’s called the confidence of the people.
Confidence is the off spring off example. A good state government should be concerned with sufficient food, shelter and the confidence of the people. The elected officials can be the catalyst for a state bailout by governing with honesty, compassion and truth. When those moral characteristics are practiced, abundance follows. Confidence is not something demanded but must be allowed to grow spontaneously. Confidence creates prosperity, which is the natural way to implement a state bailout.
The real issue is not just a state bailout; it reaches the federal level as well. We all looked to the federal government to bailout us out of this self-created mess, but government in all forms needs a bailout. The bailout solution is to lead the people by governing with honesty, compassion and truth. Confidence will be the product and prosperity will follow. That is the real message that is echoing off the walls of our democracy. The state bailout is just one piece of a bigger pie that is being cut up and distributed nationwide so everyone can taste it and choose their homemade pie of honesty, compassion and truth and experience the sweetness of abundance. That’s how we began this journey and that’s the confident way to live it.
For more information on state bailouts, visit http://www.statebailouts.com.
Douglas
Feb
3
Everybody Needs Some Kind of Bailout
Filed Under bailout | Comments Off
John Parks asked:
The fact that the housing market has hit a bump in the road of stability is an understatement. The banking industry along with the real estate industry restructured the methods of lending money so more people could buy homes. These risky lending practices finally imploded and millions of people are losing their homes. Most of these people were sold on the fact that the housing market would continue to appreciate as it has done for over thirty years, so there was a sense of security and trust involved in their decision to but the home of their dreams. Now we all see the folly in those assumptions and the country as a whole is suffering from a depressed real estate market.
Bailout has become a common term these days; everybody needs some kind of bailout. Insurance companies, banks and the stock market have jumped on the federal bailout wagon and got large injections of cash from all of us. There has to be a home loan bailout program established, or at least that’s what some members of government want, so the homeowners that made a risky choice and are now experiencing one probability from that choice, can dig out from under the mess of foreclosure and bankruptcy.
We are watching the face of the democratic system of finance and economic growth change before our bloodshot eyes. The insurance, banking and real estate businesses are rethinking their business models and a new form of borrowing and lending will surface. Gone are the days of buying a home with no down payment and not enough income to support the note that is payable each month. Credit will be harder to come by and the cash method of buying will once again be the method of choice for millions of Americans.
The home loan bailout program will probably become a reality soon. The housing market has such a drastic effect on the economy; congress, out of fear, will pass some sort of relief package that helps those who need it. After all, we all make choices we regret and want to do over again. It’s not the time to judge, it’s a time to change how we do business, so the word bailout means what it has always meant in our system; bailouts start with us. Business practices that hide, restrict, force or deceive will no longer be tolerated in our emerging system of finance
It is our responsibility to know what we are purchasing and what the consequences are before we sign on the dotted line. The control of our financial future is our responsibility and we need to choose and buy what we can afford, based on our current resources not some paper asset that may develop in the future.
There are so many different beliefs involved in a home loan bailout program, it will be debated long after it becomes a reality and that’s okay. From the contrast of losing a home, our belief system expands and we become aware of the different choices that do make our system a democracy. We can get back to basics, even though those basics will change in many ways. They still provide a foundation for the most sensible home loan bailout program of all: self-control.
Christian
The fact that the housing market has hit a bump in the road of stability is an understatement. The banking industry along with the real estate industry restructured the methods of lending money so more people could buy homes. These risky lending practices finally imploded and millions of people are losing their homes. Most of these people were sold on the fact that the housing market would continue to appreciate as it has done for over thirty years, so there was a sense of security and trust involved in their decision to but the home of their dreams. Now we all see the folly in those assumptions and the country as a whole is suffering from a depressed real estate market.
Bailout has become a common term these days; everybody needs some kind of bailout. Insurance companies, banks and the stock market have jumped on the federal bailout wagon and got large injections of cash from all of us. There has to be a home loan bailout program established, or at least that’s what some members of government want, so the homeowners that made a risky choice and are now experiencing one probability from that choice, can dig out from under the mess of foreclosure and bankruptcy.
We are watching the face of the democratic system of finance and economic growth change before our bloodshot eyes. The insurance, banking and real estate businesses are rethinking their business models and a new form of borrowing and lending will surface. Gone are the days of buying a home with no down payment and not enough income to support the note that is payable each month. Credit will be harder to come by and the cash method of buying will once again be the method of choice for millions of Americans.
The home loan bailout program will probably become a reality soon. The housing market has such a drastic effect on the economy; congress, out of fear, will pass some sort of relief package that helps those who need it. After all, we all make choices we regret and want to do over again. It’s not the time to judge, it’s a time to change how we do business, so the word bailout means what it has always meant in our system; bailouts start with us. Business practices that hide, restrict, force or deceive will no longer be tolerated in our emerging system of finance
It is our responsibility to know what we are purchasing and what the consequences are before we sign on the dotted line. The control of our financial future is our responsibility and we need to choose and buy what we can afford, based on our current resources not some paper asset that may develop in the future.
There are so many different beliefs involved in a home loan bailout program, it will be debated long after it becomes a reality and that’s okay. From the contrast of losing a home, our belief system expands and we become aware of the different choices that do make our system a democracy. We can get back to basics, even though those basics will change in many ways. They still provide a foundation for the most sensible home loan bailout program of all: self-control.
Christian