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70 percent think recession is here now or will be here soon

Written by Timothy Blake on January 07, 2008 under Archives, Economic Impact, Editorial

According to the Economic Cycle Research Institute, seven out of 10 citizens now believe we are or will soon be in a recession. Minnesota state economist Tom Stinson worries that fewer state residents will buy cars or make other big purchases, now that they have less home equity to draw on. An expected slowdown in spending and the job market lurks behind Stinson’s latest estimate of a revenue shortfall of $373 million in the state budget for fiscal year 2008-09. Other states have the same problems. The leading home price index is at a six-year low, financial services are at a 13-year low, while non-financial services are at a 56-month low, according to figures kept by ECRI.

Mortage help is frustrating as lenders are untrained

Written by Timothy Blake on January 07, 2008 under Archives, Lenders, Your Answers

Individual mortage companies have reached out to borrowers in an effort to assist them. Were those initial efforts sincere or driven public relations? The reason we ask the question stems from new reports after the Bush administration got involved. It seems that homeowners are not getting information, help, or the same answer twice. “The governor and the president are putting out information, but that definitely hasn’t trickled down to ground zero,” said Ed Smith Jr., vice president of governmental affairs and industry relations for the California Association of Mortgage Brokers.”

Lawsuits continue as subprime gets worse

Written by Timothy Blake on January 04, 2008 under Archives, Lawsuits

It is quite apparent that directors and officers are getting sued over decisions related to subprime, while investors such as pension funds are suing lenders due to subprime losses. The finance sector led the way for class action suits, with 47 Wall Street firms sued in 2007, more than four times the number sued in 2006. Mom and pop operations are not the targets of big lawsuits, however, as law firms target major banks and investment houses. To that end this effort from Rhode Island seems to be a preventive measure:

Credit card debt increases as more get behind

Written by Timothy Blake on January 03, 2008 under Archives, Economic Impact

Discover Card is running a full-page advertisement in the national media, telling Discover Card holders that they can earn a cash reward equal to their monthly interest fee if they make timely payments on their credit card debt six months in a row. Another way to look at it is to say people are enticed to do what they are supposed to do in the first place. What percentage of individuals and families want to play with fire while running the risk of 30-plus percent interest rates? Quite a few.

Mortgage game may not be for those with a conscience

Written by Timothy Blake on January 02, 2008 under Archives, Editorial, Opinion

A great article by Huliq focuses on the mortgage blame game. “You can blame who you want but mortgage lenders made these products available to mortgage companies who hired individual mortgage brokers with no formal education to sell the mortgage product that made the mortgage lender, the mortgage company and the mortgage broker the most money with total disregard to the consumer” says part of the article. We recommend reading the entire narrative, as this assessment is right on the money.

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