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Posts Tagged ‘foreclosure’

Record Corporate Profits Are Not Lowering Unemployment Rate

In Uncategorized on November 14, 2011 at 6:00 am

U.S. corporations are making record profits quarter after quarter, yet unemployment seems to be stuck at a devastatingly high rate. Why aren’t these financially flush big businesses hiring?

I’ve been writing a string of blogs about how tax debts are dealt with in bankruptcy, and I’ll get back to that after today. But this is the time of year when the nation’s major corporations report their 3rd quarter profits, and so I found myself scratching my head about the disconnect between their huge profits and their lack of hiring. So I read a number of news stories and editorials, and this is what I got out of them:

1.  Big businesses have gotten to be more “productive,” in the sense of producing more goods and services with less labor. That has happened partly through investments in labor-saving technology and partly by requiring employees to work harder and faster for the same pay. With the cut-throat labor market, companies don’t need to increase salaries to retain or replace their employees.

2.  Profits have increased because a larger percentage of sales for large U.S. corporations have been overseas. Around 40 per cent of their profits are from foreign sales. For many companies, sales are growing modestly in the U.S. while growing much faster elsewhere, especially in the “emerging markets” of China, India, and South America.

3.  Relatively strong overseas sales come with job growth overseas instead of here. According to the U.S. Commerce Department, in the past decade, U.S.-based multi-national corporations added 2.4 million jobs outside the country while cutting 2.4 million jobs here. Jobs naturally grow where sales are growing–someone has to take customer orders at the 3,000+ KFCs in China! But of course there’s also increased foreign outsourcing of work that used to be done here, from manufacturing to computer programming.

4. Normally when businesses are more productive, resulting in more profits, they tend to expand, thus creating more employment opportunities. But this has not been happening for three reasons.

a. With the double-whammy of very high unemployment and loss of home values, U.S. consumers either don’t have the means or the attitude to spend money, so companies are leery about expanding to increase production.

b. The international business environment—particularly the European sovereign debt crises in Greece, Italy and elsewhere—is making big business cautious.

c. Political gridlock in Washington, D.C. makes business planning very difficult. With the Congressional deficit-reduction “super committee” scheduled to issue its report very shortly, big businesses have been sitting tight to see if this “super committee” will come up with its momentous compromise, and what it’ll consist of.

The bottom line: big businesses don’t need to hire to produce the goods and services they are producing, at least within the U.S., and they don’t want to expand and hire here because of lackluster consumer demand and high uncertainty in the world economy and in domestic politics.

– Patrick J. Conway, attorney. http://www.patrickconwaylaw.com

Health Effects Of Foreclosure

In Uncategorized on October 3, 2011 at 7:49 am

From the New York Times.

A growing body of research shows that foreclosure itself harms the health of families and communities. In our 2008 survey of 250 people undergoing foreclosure in the Philadelphia area, 32 percent reported missing doctor’s appointments and 48 percent said they let prescriptions go unfilled, significantly higher rates than others in their community. A paper released last month by the National Bureau of Economic Research found that people living in high-foreclosure areas in New Jersey, Arizona, California and Florida were significantly more likely than those in less hard-hit neighborhoods to be hospitalized for conditions like diabetes, high blood pressure and heart failure.

More than one-third of homeowners in our study had symptoms of major depression. The N.B.E.R. study found significantly more suicide attempts in high-foreclosure neighborhoods. For every 100 foreclosures, it found a 12 percent increase in anxiety-related emergency-room visits and hospitalizations by adults under 50. Losing a home disrupts social ties to neighbors, schools, jobs and health care providers — ties that under better circumstances promote good health. Neighborhoods suffer, not just homeowners.

Understanding MERS

In Uncategorized on March 19, 2011 at 8:49 am

MERS is a way for mortgage companies to sell mortgages to one another quickly and with low cost. MERS is a straw party named as the owner of the mortgage. But it doesn’t really own it. But on county records across the country, MERS appears as the owner of millions of mortgages. As I said, the system was designed to avoid the costs involved in transferring mortgages among different owners. In theory, MERS keeps track of who owns the underlying mortgage. In practice, MERS does not keep accurate records. According to a recent study, fewer than 30% of mortgages held by MERS had accurate records.

And so the system, designed by the mortgage companies for speed and to control costs, is going to make solving the foreclosure problem much slower and more expensive.

New Foreclosure Developments

In Uncategorized on March 5, 2011 at 10:54 am

Two million homeowners are in foreclosure nationwide. Another two million home loans are severely distressed.

The state attorney generals have presented a list of demands to mortgage lenders that prohibit foreclosure during pending loan modification. That would be a major change from the way lenders now conduct business. Usually I see modifications and foreclosures pending on the same loan with homeowners hopelessly confused.

Another demand would require a permanent loan modification once the borrower made three payments on the loan. An independent review panel would check loan modifications that were denied.

What’s Worse: Foreclosure or Bankruptcy?

In Uncategorized on January 14, 2011 at 3:36 pm

Foreclosure is worse than bankruptcy in at least three ways.

1. Foreclosure means you will lose your home. Forever.

2. Following the foreclosure, you will probably owe the mortgage company money and they will try to collect it from you.

3. Foreclosure looks worse on your credit report than bankruptcy.

Bankruptcy Filings Up Nearly 14%

In Uncategorized on November 18, 2010 at 8:46 am

New bankruptcy cases increased 13.8% over the last year. This continues a trend that started several years ago. Since 2006, new bankruptcy case filings have increased. Expect the case filings to rise during the next year.

Its not difficult to understand why this is happening. High unemployment, foreclosure and credit card payment defaults also continue to go up. People need protection from creditors because their income doesn’t keep up with expenses.

Latest Foreclosure Stats Look Bleak

In Uncategorized on November 2, 2010 at 8:32 am

The latest statistics in the housing market are bleak: permanent loan modifications in September were at their lowest number since the start of the goverment program; home sales fell sharply compared to 2009 levels; home prices are falling again after a period of holding steady; 4.4 milllion homeowners are in severe default on mortgage payments but not yet in foreclosure.

Foreclosures To Resume Next Week

In Uncategorized on October 21, 2010 at 12:21 pm

Bank of America and GMAC, two of the biggest mortgage lenders, announced that they will resume filing foreclosures on Monday. Expect other mortgage companies to follow suit.

Why did they stop filing foreclosures two weeks ago? Mostly in response to news about faulty courtaffidavits. Some affidavits were signed by employees without first reviewing the records. The mortgage companies paused filing new foreclosures in order to get their records straight. They say things are in order and they are starting to file new cases.

The Long Slow Recovery

In Uncategorized on October 13, 2010 at 8:10 am

Recent economic news provided two important statistics. At the current rate of job creation, it will take nine years to get back the number of jobs lost during the recession. The unemployment numbers could get worse in the months ahead.

Median house prices have declined 20 percent since 2005. The outlook is that it will take thirteen years for housing to recover its value. That explains why so many people own houses worth less than their mortgages.

Commerical real estate vacancy rates are high. So high, it may take a decade for them to get back to where the rates were.

It looks like a long road to recovery.

Do You Need Help Saving Your Home?

In Uncategorized on August 30, 2010 at 12:54 pm

If you are behind on your mortgage payments, and cannot get current, Chapter 13 bankruptcy may be a good way to save your home. In Chapter 13 bankruptcy, you pay all or a portion of your debts over time through a repayment plan. Chapter 13 bankruptcy lets you pay off a mortgage “arrearage” (late, unpaid payments) over the length of the repayment plan — usually three or five years, depending on your income and the time it will take you to meet all the plan’s requirements.