Posts Tagged ‘McCain’
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
Many people are wondering what caused the recent mortgage crisis in the United States. Was it the failure of Fannie Mae and Freddie Mac? Was it the fact that they were lending to people that had an inadequate means to repay their notes? Or was it a combination of events? More importantly what is the United States doing to stop the panic, and how will it affect international markets?
The record $700 Billion dollar bailout is largely the result of the failure of two of the largest financial lenders in the secondary mortgage industry. The lenders I speak of, Country Wide and Fannie Mae, failed as a result of a sub-prime mortgage crisis in the United States over the past few months. Many thought Fannie Mae would have nothing to worry about because it was created by the federal government. However the lack of oversight and their governance by Washington insiders left them almost above reproach. This proves to be a clear cut failure of the leadership that these two huge mortgage lenders have. The risky behavior that these companies implemented proved to be a huge mistake. And due to the fact that two of the largest mortgage lenders failed, the lending industry itself has slowed to a crawl. One of the reasons was a result of all the foreclosures and bankruptcies occurring in the United States. The other being that the financial institutions no longer trusted the solvency of their business partners. This would eventually lead to the drying up much of the liquidity in the market.
In general, United States mortgage crisis has definitely caused the aggregate financial markets to fluctuate radically. Banking had become a global industry with its web reaching into many countries. Foreign investors are frustrated by the unpredictability of the U.S. economy. Mostly, due to the fact that the United States government has no clear cut remedy for this mortgage crisis. A second thought is should the government intercede in a free market system, or let them fail? The United States Federal Government in order to impede the panic agreed to infuse $700 billion dollars in an effort to bailout the troubled industry. However this bailout will not only affect U.S. markets but will also drastically affect global markets and additionally the results of the bailout are not guaranteed. This has also prompted many other industries to seek governmental intervention in an effort to starve off their losses in a recessionary economy. Who could be next?
Internationally, when news of a potential bailout was heard, international markets fell sharply. The confidence in U.S. markets was shattered, and as a result the Yen and Euro hit all-time highs against the U.S. dollar. The only upside to this was an increased appeal of American exported goods to foreign markets. Some of the major implications of this bailout plan were seen on September 30, 2008. Many markets affected included Japan’s Nikkei Index, China’s Hong Kong Exchange, the London FTSE, and Russian Trading System were down notably at word of the rejected Wall Street bailout. In fact the RTS, dropped so sharply that it suspended trading until further notice, sadly this is not terribly uncommon in Russia. The international markets continued there extreme volatility until a final decision was reached by Congress to approve the bailout. Finally on October 1, 2008 the American Housing Rescue and Foreclosure Prevention Act of 2008 took effect to try and ease the nerves of international investors.
The Canadian and European markets slowly began to rise again after the bailout was secured in writing. The Russian Trading System rose 2.4% to 1,504.20 when the bailout was confirmed. The United States Stock Market of late has also begun to stabilize as well. Foreign investors still remain cautious because the American credit crisis is far from over. Signs of stability were starting to appear, but news of other bankruptcies in the United States may cause another slide in global markets. For example, some major banks in the U.S. have even started to fail like Washington Mutual and not close behind is Citibank. This also leads to an increase in bank mergers and consolidations. And with any merger there always seems to be job losses, thus leading to a rise in unemployment. The cycle of recession has a distinctive pattern. With unemployment rates hitting a 14 year high of approximately 6.5%, the U.S. economy is obviously in shambles and has the potential of heading toward a rough recession. This then leads many to still wonder if the financial bailouts are over or if the U.S. economy can recover successfully.
The United States is currently in the middle of a mortgage crisis. Foreclosures on mortgaged homes are at an all time high, and predictions say that billions of dollars of wealth will have been lost before its through. The effects of the crisis are being felt on all levels – aside from people facing foreclosures on their homes, many lenders have gone bankrupt. Finally, the government has decided to step in and provide some relief to lenders and borrowers alike. But the question is, just how will this government bailout affect a person’s mortgage?
What this bailout plan does is, unfortunately, pretty limited. It won’t help out everyone. What the bailout does on the level of the individual borrower is to freeze the borrower’s mortgage for five years. This keeps the interest rate of the mortgage down for a period of time so that the borrower can get their finances in order and dig themselves out of their situation. Unfortunately, there are a couple of stipulations on this program.
The first stipulation is that it only applies to people who have less than 3% equity on their homes. People with higher equity are simply out of luck. The second qualification is that the borrower must be no more than 60 days late paying their mortgage. Needless to say, for people who are already in severe trouble and have been missing payments aren’t helped at all by this.
In addition to the above qualifications a buyer would have to prove that he or she couldn’t afford increased interest in their mortgage. The government buyout plan also only applies to subprime mortgages – but there are many people struggling with prime mortgages who face financial difficulties, too. Unfortunately, this leaves a lot of people who were looking for a little relief out of luck.
The ultimate problem with this bailout program is that it only serves to delay inevitable outcome. The bottom line is that if you are living in a home that you can’t afford to live in, even if the government bailout helps you, you may still find yourself in trouble. Unless a significant financial change or a reduction in the interest rate or principle is in the wings, you chances are at the end of the five-year freeze you still won’t be in a good place.
Another perceived problem with the government bailout program is that it works to reinforce the behavior that put the housing market in the crisis it faces today. Subprime lending encouraged people to try and buy houses that they couldn’t really afford, and the bailout program is helping those same people. Meanwhile, people who had made smart choices about buying a home, but faced some other financial problem are left high and dry.
The unfortunate bottom line is that if you can’t pay your mortgage, chances are that the government bailout isn’t going to save you from foreclosure. Unless you have good reason to believe there’ll be a change in your financial fortune, it may be time to start preparing for the worst.
“How many billion?” That’s what millions of Americans were saying last fall when they first learned about Congress’ proposed $750 billion bailout package. Boy did that cause a big hoopla over! Some Americans agreed with the notion and need for the $750 billion financial industry bailout package while others despised it. In the end, Congress passed the bailout. While the major companies that received a portion of the bailout money to stay afloat saw some immediate benefits of the bailout, it wasn’t until January that the average American—homebuyers, in particular—began to see the trickle-down benefits.
Trickle, Trickle.
While the $750 billion bailout package was designed to help various financial institutions, the help the companies received did come at a cost to the firms: the United States government essentially gained a significant stake in those businesses when they doled out a portion of the bailout to firms. The specifics of the bailout and the deals with each financial firm are complex. Therefore, we won’t go into all of that. Besides, it’s not all that interesting. What is interesting is that, once the deals were done, the U.S. government emerged as the entity to provide financial backing for a majority of the mortgages in the U.S. That means that, if you already have a mortgage, Uncle Sam might actually now back a portion of your financing; it also means that if you’re looking to buy, Uncle Sam will likely provide the funding for the mortgage loan that you need.
What’s In It For Me?
I know what you’re thinking: What’s in it for me? In a word: Lots. Mortgage rates have done just as financial experts predicted: They’ve plummeted! The national average in January was 5.26% with rates in some areas being less than 5%. Now, if you haven’t been keeping up with the mortgage industry, that dip is actually a good thing for American homeowners and homebuyers. How so? Well, that depends on which side of the real estate deal you’re on.
If you are a current homeowner, low mortgage rates mean that you can attempt to refinance your mortgage loan at a mortgage rate that’s significantly less than your current mortgage rate. As a result, your mortgage payment will be smaller, and therefore, it will be easier for you to keep your home in this tumultuous economy. Meanwhile, if you’re a homebuyer, the low mortgage rates mean that owning a home will be less costly; your mortgage payment, as long as you buy at or below your means, will be affordable. Though this is good news for you—whether you’re a homeowner or homebuyer—remember this: Being offered a bargain mortgage rate, or a mortgage loan at all, is not “automatic.” You still have to do your part to make sure your credit score and overall finances are in check to qualify for a new mortgage or to refinance your current mortgage loan.
The Hope
The goal of the $750 billion bailout package was, of course, to stabalize the American financial industry. While it appears that the package has succeed in being an excellent band-aid for the United States’ financial industry’s woes, whether it will be enough to get the American economy back on track for the long-run still remains to be seen; that’s a lofty aspiration that may or may not be realized. The glimmer of hope that the bailout package will energize the housing industry is much brighter. The lower interest rates will make mortgages more affordable; that means that, in theory, more homeowners will be able to afford to keep their homes through refinancing their mortgages and that more homebuyers will be able to secure affordable mortgage rates.
The Reality
While mortgage rates have been positively affected so far, the future remains uncertain. Therefore, if you’re planning to buy or refinance, don’t drag your feet. It took just three months for the bailout trickle down to reach American homeowners and homebuyers, that trickle could dry up just as quickly.
A banker or bank is a financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money.
The first modern bank was founded in Italy in Genoa in 1406, its name was Banco di San Giorgio .Many other financial activities were added over time. For example banks are important players in financial markets and offer financial services such as investment funds. In some countries such as Germany, banks are the primary owners of industrial corporations while in other countries such as the United States banks are prohibited from owning non-financial companies. In Japan, banks are usually the nexus of cross share holding entity known as zaibatsu. In France “Bancassurance” is highly present, as most banks offer insurance services (and now real estate services) to their clients. http://banks-banking.blogspot.com
Banks have influenced economies and politics for centuries. Historically, the primary purpose of a bank was to provide loans to trading companies. Banks provided funds to allow businesses to purchase inventory, and collected those funds back with interest when the goods were sold. For centuries, the banking industry only dealt with businesses, not consumers. Banking services have expanded to include services directed at individuals, and risk in these much smaller transactions are pooled. http://banks-banking.blogspot.com
Origin of the word
The name bank derives from the Italian word banco “desk/bench”, used during the Renaissance by Florentines bankers, who used to make their transactions above a desk covered by a green tablecloth. However, there are traces of banking activity even in ancient times. In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called a bancu, from which the words banco and bank are derived. As a moneychanger, the merchant at the bancu did not so much invest money as merely convert the foreign currency into the only legal tender in Rome—that of the Imperial Mint.
Traditional banking activities
Banks act as payment agents by conducting checking or current accounts for customers, paying cheques drawn by customers on the bank, and collecting cheques deposited to customers’ current accounts. Banks also enable customer payments via other payment methods such as telegraphic transfer, EFTPOS, and ATM. http://banks-banking.blogspot.com
Banks borrow money by accepting funds deposited on current account, accepting term deposits and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current account, by making installment loans, and by investing in marketable debt securities and other forms of money lending.
Banks provide almost all payment services, and a bank account is considered indispensable by most businesses, individuals and governments. Non-banks that provide payment services such as remittance companies are not normally considered an adequate substitute for having a bank account. Banks borrow most funds from households and non-financial businesses, and lend most funds to households and non-financial businesses, but non-bank lenders provide a significant and in many cases adequate substitute for bank loans, and money market funds, cash management trusts and other non-bank financial institutions in many cases provide an adequate substitute to banks for lending savings to http://banks-banking.blogspot.com
Definition
Cathay Bank in Boston’s ChinatownThe definition of a bank varies from country to country.
Under English common law, a banker is defined as a person who carries on the business of banking, which is specified as:
conducting current accounts for his customers
paying cheques drawn on him, and
collecting cheques for his customers.
In most English common law jurisdictions there is a Bills of Exchange Act that codifies the law in relation to negotiable instruments, including cheques, and this Act contains a statutory definition of the term banker: banker includes a body of persons, whether incorporated or not, who carry on the business of banking’ (Section 2, Interpretation). Although this definition seems circular, it is actually functional, because it ensures that the legal basis for bank transactions such as cheques do not depend on how the bank is organised or regulated. The business of banking is in many English common law countries not defined by statute but by common law, the definition above. In other English common law jurisdictions there are statutory definitions of the business of banking or banking business. When looking at these definitions it is important to keep in mind that they are defining the business of banking for the purposes of the legislation, and not necessarily in general. In particular, most of the definitions are from legislation that has the purposes of entry regulating and supervising banks rather than regulating the actual business of banking. However, in many cases the statutory definition closely mirrors the common law one. Examples of statutory definitions: “banking business” means the business of receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of this Act; (Banking Act (Singapore), Section 2, Interpretation).
“banking business” means the business of either or both of the following:
receiving from the general public money on current, deposit, savings or other similar account repayable on demand or within less than [3 months] … or with a period of call or notice of less than that period; paying or collecting cheques drawn by or paid in by customers
Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct debit and internet banking, the cheque has lost its primacy in most banking systems as a payment instrument. This has lead legal theorists to suggest that the cheque based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties, even if they do not pay and collect cheques.
Accounting for bank accounts
Bank statements are accounting records produced by banks under the various accounting standards of the world. Under GAAP and IFRES there are two kinds of accounts: debit and credit. Credit accounts are Revenue, Equity and Liabilities. Debit Accounts are Assets and Expenses. This means you credit credit accounts to increase their balances and you debit debit accounts to increase their balances. This also means you debit your savings account everytime you deposit money into it (and the account is normally in deficit) and you credit your credit card account everytime you spend money from it (and the account is normally in credit).
However, if you read your bank statement, it will say the opposite- that you have credited your account when you deposit money, and you debit when you withdraw it. If you have cash in your account you have a positive or credit balance and if you are overdrawn it will say you have a negative or a deficit balance. The reason for this is because the bank, and not you, has produced the bank statement. Your savings might be your assets, but it is the bank’s liability, so your savings account is a liability account which is a credit account and should have a positive credit balance. Your loans are your liabilities but the bank’s assets so they are debit accounts which should have a negative balance. Below where bank transactions, balances, credits and debits are discussed, they are done so from the viewpoint of the account holder which is traditionally what most people are used to seeing.
If you have cash in your account you have a positive or credit balance and if you are overdrawn it will say you have a negative or a deficit balance. The reason for this is because the bank, and not you, has produced the bank statement. Your savings might be your assets, but it is the bank’s liability, so your savings account is a liability account which is a credit account and should have a positive credit balance. Your loans are your liabilities but the bank’s assets so they are debit accounts which should have a negative balance. Below where bank transactions, balances, credits and debits are discussed, they are done so from the viewpoint of the account holder which is traditionally what most people are used to see in http://banks-banking.blogspot.com
If you are not familiarized with the process of applying for a payday loan or cash advance maybe this can be of interest. There are many persons that haven’t even heard this term before that is why it’s better to get the scoop in order to know if maybe this service can ever be of help for you.
It is not only about our country being in the middle of a financial crisis, we can be personally facing important and difficult economic problems for various reasons. To be able to get through them with success there are always practical solutions that can help you get on your feet.
Encountering a payday loan company is precisely a great way to get out of that temporary financial struggle. But getting an online cash advance can be even more convenient than you think.
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Once your cash advance has been approved, your money will be electronically deposited to you overnight, that’s right you don’t have to wait for a check to process or take a trip to your bank.
Maybe it all sounds too good to be true that is why you must go online and see for yourself that all the mentioned is true, Secured E Money can be your solution.
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.
Despite efforts by the federal government and commercial lenders to suggest that there is ample business funding, confusion seems to be increasing about small business loans and working capital loans. As a result, the actual availability of basic business finance services such as commercial real estate financing and business cash advance programs is not clear to many commercial borrowers.
It seems apparent that there have been many reports suggesting that normal commercial finance channels are either frozen or extremely sluggish. After reviewing other funding sources, it is possible to find more commercial loan financing options than such reports might suggest. Uncertainties in credit and financial markets have produced misleading and often conflicting information about commercial financing availability. For most business owners, it is probably not clear if business finance funding is realistically available to them or not.
In spite of some admittedly bad news, there continue to be to reliable funding sources for commercial real estate loans, working capital loans and especially for business cash advances. At the same time, the current negative economic conditions will prove to be difficult for most businesses. Commercial borrowers should expect that extra efforts will be required to successfully arrange commercial financing. An especially harsh reality for business financing is that many banks have discontinued all or most of their business lending activities, often with very little advance notice.
To use an example, commercial finance reports might not accurately reflect that some specialized kinds of commercial financing have been disproportionately disrupted. Commercial borrowers might be unnecessarily confused by reports that do not refer to all commercial loan situations but rather primarily apply to a very specialized form of business financing. To illustrate with a key example, commercial construction loans are currently in short supply by most accounts. Such specialized business loans are not as easily available as they were just a few months ago, and a more accurate accounting would reflect that the number of commercial lenders currently active in construction financing has shrunk dramatically. At the same time, most commercial real estate loans without new construction have not been as severely impacted as funding requests which do involve construction financing.
Several publications have reported that most new business financing requests are on hold or have simply been rejected due to recent financial market uncertainties, and this is another example of how business finance funding reports might confuse small business owners. While the sources for this information might have been honestly told by one or more lending institutions that they are in fact deferring new commercial loan funding, this does not mean that is the case for the entire country. If the discussion involved automobile sales, it would be comparable to concluding that nobody is selling cars anywhere after learning that several major dealers and two manufacturers announced that they were going out of business due to lack of adequate sales. Just because one or more banks fail or stop making business loans, it does not mean that there are not commercial loans available from other sources.
Because the banking industry has been involved in financial disruptions of epic proportions, commercial borrowers should maintain a cautious perspective in determining how to obtain and refinance small business loans. Many banks are sounding and acting like they have been through the equivalent of a train wreck. In such a natural disaster, it might not be prudent for business owners to seek the advice of banks which effectively caused the train to derail in the first place.
Despite reports about limited availability of business financing, some commercial lending activities such as business cash advance programs are actually as active as they have ever been. In the current commercial funding crisis, small business owners should seek a commercial loans expert for a realistic assessment and candid discussion about working capital loans and business finance programs.
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.