Foreclosure Workouts - Save Foreclosure » Foreclosure

Where we are going? Who owns home?

Purandar Amin — Thu, 09 Jul 2009 12:32:09 +0000

Today is our independence day. We need to take the stock of our independence. According to Treasury Department, our national debt is $ 11,518,472,742,288 as of last Wednesday. Many of us cannot even read the number. China, Japan and Oil exporting countries are our largest creditors. Interest payments are now $ 452,000,000,000 annually. This year our estimated deficit is $ 1,850,000,000,000. It means increasing debt service by additional $ 75,000,000,000 approximately. Are these numbers too big? Wait until you hear this: US Government has $45,000,000,000,000 in unfunded liabilities for the retirements and health commitments. The total is over $ 56 TRILLION. These numbers will keep rising for a foreseeable future. To understand the magnitude of these numbers, divide them by the number of persons living in United States. It is $ 186,000 per person! Some economists will try to calm you down by converting these numbers to a percentage of gross national product. Who cares for GNP? All we care is what $ 450,000,000,000 debt service is doing to our personal fortunes. How would like to eliminate all of your income taxes? Or take care of your major medicals or medicines without any cost? How about free education to all your children? How about making all homes free and clear in 3 years? I cannot list even all the things we can accomplish. Whoever thinks we are on a viable course must be crazy. No wonder our homes are in foreclosures as government takes 40 cents of each dollar you make. Can we not pay our mortgage from forty percent of our income?

These are the domestic concerns but let tell you how it plays internationally and on our future lives. Just one example. China has almost $ 700,000,000 in US Paper. She cannot spend the dollars enough and it keeps piling up. It is getting close to monopoly money. So she goes to African countries and gives out few billions in aid here and there and in turn gets mining rights on cobalt and other precious minerals. Africa has 60% of world supply of Cobalt. Cobalt is the essential material for all electronic equipments. Do you get the picture? Cobalt is not the only material. Low cost or no cost loans to Poor nations of Africa are to be repaid in oil and other materials at bargain prices to keep the factories at home humming for the low cost products to be exported to USA and diplomatic favors on the world stage. Vicious cycle continues.

There is nobody to blame but our collective failure to grasp the enormity of the effect of the global village. Our personal day to day decisions as to our buying habits, leadership failures and limited and short term approach caused this quagmire. I wish our leaders had addressed the balance of payments in trade for last 30 years? When you import more, you export the job. When you export the job, some one else owns the home. This is the simple economics that prevails in the end.

Third Wave is coming:

Purandar Amin — Thu, 09 Jul 2009 12:30:51 +0000

This Friday was a black Friday for the employment news. 48 states recorded higher rate. Six states broke the previous records. Only luckier ones were Nebraska and Vermont. California and Nevada went up the hill with 11% or more, highest in 25 years. The salt on the wounds is the prediction by the Chairman Ben Bernanke that the improved economy will not help. The companies would not rush to hire immediately. How many of us know the unemployment picture is not the whole truth? I remember the government during Regan era changed the way it calculates the unemployment rate just to look it good for them.It does not count those who gave up the job search after six months!!! My friends, We do not know the bottom. If you think you are through with these numbers consider the following.

Commercial Mortgages worth $ 171 Billion will be due this year. Many will end up in foreclosures. Why? First, most properties have lost 20-25% in values. There fore it will not meet loan to value ratio. Second, Most lenders have lowered their loan to value ratio that throws off even good performing properties out of box. Add to that increased liquidity ratio, stricter credit requirements and financial worthiness of the borrowers.Gone are the days of 80-90% LTV financing. Hotels are expected to run into rough weather after this summer for a period of 2 1/2 years. There is lots of smart-vulture money sitting on sidelines waiting for the food.

Lastly, There is an estimated debt of one trillion dollars in credit cards. With unemployment ratio over 10%, expect 25-30% of unsecured debt to go bad. That is $ 250 billions.Banks have already started to cancel credit cards or limit the credit lines. Another bail outs for the Bankers?

What will be the spill over effects of these cyclones on the foreclosures? The temporary moratoriums imposed on the foreclosures are about expire in few weeks.

The greatest transfer of the wealth is about to take place in 2010. Are ready to defend your turf or take advantage?

Untold story of Foreclosure!

Purandar Amin — Mon, 16 Feb 2009 07:29:39 +0000

There is lots of commotion about the loss of economic values to Lenders, homeowners and ultimately to governments. It seems nobody is talking about a loss that is unseen but felt very deeply, personally and at social structure of our existence. A scenario develops likes this: A breadwinner is unemployed or cannot work for what ever reason. He is now mentally down and doubting his abilities. His chances to get proper work, salary and to pay the bills are very weak. He starts asking family members to cut down expenses, the first signs of stress and tension.

At this very point of time comes the foreclosure notice. Now the whole family is worried about the keeping roof over the head, making choices between roof and bread. If spouses are not intimately and psychologically connected, a stress also begins to develop in their marriage. Patience is in short supply. Anger is plenty. Ultimately children begin to feel the pain also. Family goes further down mentally.

If a divorce happens or person goes into deep depression, the mental damage is enormous. When we think of this loss to millions of people, we cannot even begin to evaluate the loss. I have seen people feeling suicidal syndrome or even committing the suicide.

Who is responsible for this? We cannot just blame the person going over board. The managers of our nation’s economy, lenders, brokers, appraisers and society as a whole contributed to this downfall. The accumulated damage to our social structure is enormous. Is any mental stimulus available from President Obama or President Bush or from Investment bankers?