The Real Cause of the Credit Crisis

Politicians and other talking heads (and thus the general public) seem to agree that the current credit crisis was caused by lack of governmental oversight of the big bad bankers. In actual fact, it was just the opposite. The cause of the crisis was Government pressure (mostly but not entirely from Democrats in the White House and Congress) imposed on the mortgage lending industry as far back as the beginning of the Clinton era. Semi-government institutions, Freddie Mac and Fannie Mae, caved in to the pressure, and by readily buying ever-increasing numbers of shaky loans, they made it highly profitable for loan originators (mostly local brokers and bankers) and loan "bundlers" ( Wall Street) to willingly go along.

Starting in 1992, a majority-Democratic Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, became aggressive and creative in stimulating "minority gains." The Clinton administration investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio were made up of loans to low-to medium-income borrowers by the year 2001. The Clinton administration criticized the mortgage industry for looking at " outdated criteria, "such as the mortgage applicant's credit history and ability to make a down payment. Threatening lawsuits, Clinton's Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn't a joke – it's a fact.

By 1999, liberals were bragging about extending affirmative action to the financial sector. A Los Angeles Times reporter hailed the Clinton administration's affirmative action lending policies as one of the "hidden success stories" of the Clinton administration, saying that "black and Latino homeownership has surged to the highest level ever recorded." After 2001, a major new market was found for these loans-illegal immigrants.

Meanwhile, a few economists (but no politicians) were screaming that the Democrats were forcing mortgage lenders to issue loans that would fail as soon as the housing market slowed and overly-stretched borrowers couldn't get out of their loans by refinancing or selling their houses. In Bush's first year in office, the White House chief economist, N. Gregory Mankiw, warned that the government "implicit subsidy" of Fannie Mae and Freddie Mac, combined with loans to unqualified borrowers, was creating a huge risk for the entire financial system . Rep. Barney Frank denounced Mankiw, saying he had no "concern about housing". The New York Times reported that Fannie Mae and Freddie Mac were "under heavy assault by the Republicans," but these entities still had "important political allies" in the Democrats.

During the 2004 presidential campaign, George Bush bragged about the fact that a greater percentage of Americans owned their own homes than ever before, but (except for praising low interest rates) he did not explain how or why this happened. President Bush pushed even farther; he asked lawmakers to eliminate the down payment normally required for FHA loans. So Republicans have dirty …

Making Money From Credit Card Debt – Where to Find Credit Card Debts Available For Sale

The current economic crisis has created a situation where making money from credit card debt is actually an excellent business opportunity.

The following statistics illustrate the magnitude of the problem and potential opportunity. Innovest Strategic Value Advisors, a research company, reports credit card charge-offs were $22.6 billion for all of 2007. That figure rose to $76.9 billion in 2008 and $93.1 billion in 2009.

However, to profit from such a business opportunity you first have to know where you can buy credit card debts and there are three (3) main sources where you can purchase credit card debts:

1. The Government

2. Banks

3. Loan Brokers

Let’s take a brief look at each source.

1. The Government

You can purchase loans from the FDIC (Federal Deposit Insurance Company). Loans for sale are advertised directly on their website. The information that is displayed includes the:

~ Type of loan, e.g. commercial, industrial or consumer,

~ Source of the loan, i.e. the financial institution where the loan came from,

~ Aggregate face value of the loan,

~ Average balance of each loan,

~ Status of the loan, i.e. performing or non-performing,

~ Period of time allocated for review,

~ Bid day,

~ Date by which successful bidder has to pay for the loans.

It’s clear to see the importance of this information but this is still just scrapping the surface when it comes to the analysis you should perform on each loan to make a decision as to whether or not you want to submit a bid for the loans and how much you want to place your bid for.

2. Banks

You can also purchase loans direct from your local bank and by this I don’t mean a local branch of a national bank. The manager of the latter would not have sufficient flexibility or clout to be able to negotiate the sale of any failed loans that they might have. However, with a small, local bank, if you approached your bank in the right manner, an offer to purchase failed loans which the bank has had to charge-off, could seem quite lucrative. Bill Bartmann goes through a very detailed, step-by-step procedure as to how to approach a local back with a view to purchase their delinquent loans in his book best-selling book Bailout Riches: How Everyday Investors Can Make a Fortune Buying Bad Loans for Pennies on the Dollar.

3. Loan Brokers

Purchasing loans from a loan broker can be more expensive but loan brokers segment their loans more and so the profiles of the package of loans that they put together are more similar. And if you’re just starting out in the debt collection business then you’re likely to have greater success if you narrow your focus and not consider loans of a broad spectrum. You’ll probably also find that you’re able to make a profit faster when you take this approach.

One example of a loan broker is the NLEX (National Loan Exchange Inc). It is the “leading …

Business Ethics Case Study; Unbelievable Government Credit Card Abuse

In business management classes across the country MBA students study business ethics. In fact, there are now MBA degrees available that are called Ethics MBAs. But in the real world how ethical is the business community? How ethical is our own government?

How many business travelers for their corporations charge personal items to their credit cards of their corporations? Corporations watch this very closely to make sure everyone follows the rules. Not everyone follows the rules and often there are people who go to extreme lengths to hide their misdeeds.

From a business ethics standpoint corporations and their workers are much more honest and forthright than those who work in government. In fact government credit card abuse at all levels of government is at an all-time high. It is so bad that the federal government actually had to make another law to try to curb the abuse of government credit cards. Has this new law helped?

Actually it looks as if it has on paper audits but in reality those fine folks in government still abuse their government credit cards, which is taxpayers money. The problem is so severe and the punishment so little that nothing is really being done. That is to say the problem is running rampant still.

Simply instituting controls and checks and balances on government credit cards does not alleviate the fraud. Dishonesty in government is the norm and although many people believe that those who work in government are of less IQ they are still clever enough to beat the system and steal taxpayers money.

From an MBA standpoint of fiscal management this is a good case study. A piece of corporate credit cards or government credit cards must be followed up on. It is essential to make sure that the purchase is made by government employees are indeed for a facial government business and not personal pleasure; such as gentlemen's clubs, personal car washes or a dinner for a family of four for personal use.

It appears we cannot trust those fine folks in government and it is about time that we enforced the letter of the law on to the government and the workers who think they are above it. Consider this in 2006.

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Credit Debt Bailouts – How To Legally Never Pay Back Your Credit Card Debts

Credit debt bailouts are extricating credit card debtors from ultimate failure which they are facing in the shape of drowning in the pools of unsecured liabilities through their bankruptcy. Credit debt bailouts are rescuing not only credit card companies but also debtors because both futures are associated with each other. If debtors fail in meeting with their financial commitments i.e. repayment of unsecured debt than financially disturbed creditors cannot bear such disruption and they may have to move towards foreclosures.

Foreclosures of creditors i.e. credit card companies will certainly negatively impact over the confidence of national and international investors on the financial system and they suck out their billions of dollars investment from it. The federal government doesn’t want this situation to be happened because it will create panic and may collapse whole financial system that’s why it is offering credit debt bailouts.

Credit debt bailouts are actually stimulus packages for creditors through which they can strengthen their financially disturbed situation. On the basis of credit debt bailouts several debt relief programs are being offered for credit card debtors. These debt relief programs are pursuing only one single aim i.e. enabling debtors through different means to get rid of their massive unsecured liabilities.

Among several beneficial debt relief options, the debt settlement which is also known as debt negotiation enables debtors to legally never pay back their credit card debts. Through this program debtors can engage creditors in negotiation process. This negotiation process will results in reduction in more than 50 percent of unsecured liabilities and you will never asked to pay back such forgiven amount. Debtors cannot compare this program with other debt relief options because it has an edge over them on in other words it is constantly outperforming other debt relief options through its beneficial features.

Credit debt bailouts are best offered in the shape of debt settlement program because through this program not only unsecured, unbearable and massive liabilities could be eliminated but also the stabilization in the financial matters of debtors is obvious.

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Government Stimulus Grants For Golf Carts – Get a Golf Cart Tax Credit From the Government

Don’t you just love golf, except for maybe the adulterous Tiger Woods or the long walks between holes? Well, there is not much that can be done about the Tiger Woods fiasco but as for that walk along the green, you can get government stimulus grants for free golf carts.

The government has put together thousands of different programs that are to benefit the American people, but many people have no idea that these programs exist. And for that reason, much of the money that was earmarked to help the citizens of this great country, gets unused.

But if you are lucky enough to find out about these grants, then you may have a shot at getting some of this cash. For example, the government has first time home buyer grants that can equal upwards of $15,000 in some states. In other states, you can receive upwards of $50,000 for purchasing a home in foreclosure. But in all states, you can get a free golf cart, if you purchase by December 31, 2009. And there is talk that this program is going to get extended past the initial date.

This government stimulus grant program will give you between $4,200 and $5,500 in a federal tax credit if you purchase one of the qualifying golf carts, which can make the golf cart nearly free. Plus, in some states, there are also added grant money that covers the whole cost of the cart. Keep in mind, a tax credit, unlike a deduction, is like getting free money back from the government at the end of the year, or having to pay less in your taxes if you owe money at the end of the year.

To qualify, the golf car must have a 17-digit vehicle identification number and must be street legal, with headlights, taillights and registration with the Department Of Motor Vehicles.

But don’t be fooled into thinking that you must use your golf cart for golf-playing purposes. Nope, this is a street legal vehicle and many people enjoy using them to tool around their local communities or down to the corner market, which will not only save you money on gas, but reduce your carbon footprint.

So, if you have not thought about getting a golf cart recently, maybe you should. One local golf cart salesman stated that some of the US manufactures plan to roll out some street legal cars at the beginning of 2010, which will also be a benefit to our American economy.

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Credit Card Debt – The Saddest News You Will Ever Hear About the Card Debt You're Paying

The saddest news you will ever hear about your credit card debt is not your 30% interest rate or even the fact you will be 92 years old when you make that last payment provided of course you don't use the card anymore. It's far worse! You've been suckered into a card game you can never win! Sorry to be the one breaking the news to you but there are some things you can do to get even with those card sharks.

Sometime in the past 30 years you looked forward to getting that first card which announced to the world you had come of age, were trustworthy and could get whatever you wanted for the asking because some large financial institution said they were standing behind you all backed up by a contract with so much fine print you couldn't read it without a magnifying glass.

After the zero interest transfer rates ran out when you had attempted to juggle your accounts, you began to notice the pain in your backside especially around your wallet area was getting worse and that wallet pain quickly turned into a continuous headache. The unseen superglue on the card had worked and the little plastic demon was now firmly attached to your financial life.

To see exactly how you became a slave to the card company use the search term "Frontline-the credit card game" and take notice in the beginning of this PBS special when they introduce you to the other man in the White House. This mastermind of debt set the stage for the current economic crisis.

Other large financial institutions used the mastermind plan to entrap the entire population in a vicious cycle of debt which included none other than the United States government. You only have to look around to see the devastating effects of greedy bankers gone wild. Business slowdowns, shutdowns and bankruptcies produced a cascading domino effect leading to the present economic meltdown.

All this led to the biggest government bailout of financial institutions considered too big to fail in the history of the world. You may remember the multimillion dollar bonuses handed out to top executives as a reward for devising the largest transfer of wealth scheme ever devised and guess who's going to be paying that tax bill for years to come.

Are you ready to get even? Ready to stop paying that credit card bill and stop worrying about it? Here's one easy way of doing it. Use the search term "FTC debt video" and watch the cartoon show. You'll see the basics on handling collection phone calls and written notices. Some people are using digital recorders to make money when collectors violate their rights. Use the search term "man wins $ 1.5 million in debt collector lawsuit" to see for yourself.

When you respond to written collection notices with a demand for proof of debt, you'll discover the collectors can't furnish legal proof under the 1966 FTC law. Bad news for the bankers but …

Bail Me Out – Credit Card Forgiveness Secrets

Every week, major corporations across America are receiving huge government checks to erase their bad debts. These companies’ massive debts are wiped clean and we. The taxpayers, are the ones that have to pay for it. With all of these companies being handed billions of dollars, the average consumer is asking: “Where’s My Bailout?”

As large companies continue to scream “Bail Me Out,” the government seems content to give them a free pass on their bad decisions. In contrast, the average family has over $10,000 in credit card debt and no government program to erase their debts. The good news for those families is that there are credit card forgiveness programs available that can completely erase credit card debt. You just have to know how to access them.

How Do I get My Bailout?

Banks and credit card companies have done all they can to keep the credit card forgiveness programs hidden from you. With no publicity and no guidance, it’s no wonder that so few consumers know that they exist. In actuality, these programs are easily to use, totally legal and highly effective. You just need to know how to use them. Continue reading and I’ll show you how you can say “I got my bailout!” To begin, you’ll want to purchase a guide that will walk you through the straightforward process. These guides usually cost less than $50 and will help you erase thousands of dollars of credit card debt. Research these programs carefully and read the reviews. Many of these programs claim to offer total credit card forgiveness, but in reality only consolidate your loans. If you want to have a program “bail me out” avoid debt counseling and loan modification systems and programs.

Who Will Bail Me Out?

These credit card forgiveness programs require no outside agencies or complicated forms. With a little guidance, you can do it all on your own! You can totally avoid debt counseling and there is no need to apply for any sort of loan modification program. You only need a few simple pre-written letters and forms pre-written by licensed attorneys and you can begin the process to claim your own bailout. The systems available supply you with all of the forms you’ll need and tell you where, when and who to submit each form to. There is absolutely no application process and you can’t be denied based on income status. You only need to follow the simple steps. The laws are already on the books, you simply need to utilize them.

Credit Card Forgiveness: How to Get Started

Getting started on your credit card bailout is simple:

1. Buy a Credit Card Forgiveness System: This step is optional, but for less than $50, these programs will simplify the entire process and ensure that you follow every step perfectly. The pre-written attorney forms and letters will save you countless hours of time and many needless headaches.

2. Gather Your Current Card Statements: Get together your most recent statements. I recommend creating …

Congress Looks to Avert Eurozone Struggles and Damage to Sterling US Credit Rating

This week, President Obama urged congress to reach a compromise on the so-called debt ceiling-the legal ceiling for federal debt-and agree on a new budget that would balance America’s books. Policy wonks and politicos have prophesized that any prolonged, bipartisan stalemate would plunge America into economic turmoil anew. It seems the congressional “Gang of Six, “composed of the top lawmakers on either side of the isle, has finally agreed to move forward with talks to cut nearly 3.7 trillion dollars in federal spending over the next 10 years. Though it is unclear from what programs and jurisdictions this money will come, it is clear that reaching a final version any compromise and subsequent bill, in the bipartisan House and Senate, will be long and anguished.

Credit card bills become a headache for everyone

Much of America will be relieved that the US government isn’t going to shutdown as it threatened many times earlier this spring. Some might recall the thousands of government employees furloughed because lawmakers couldn’t reach an agreement over the federal budget.

Evidently, even the most powerful people in the country are struggling to reign in spending and control their credit.

These temporary lapses in government underscore the availability, or lack thereof, of new credit and new credit alternatives. US lawmakers are effectively engaged in what many credit card customers would recognize as a credit card negotiation.

Like all credit card consumers with revolving debt, many lawmakers are getting their first significant taste of the anxiety and pressure that comes when creditors call and you can’t pay up-in this case, failure to pay up could mean years of political backlash from angry voters. What’s worse, a federally sized “credit card negotiation” gone wrong could undermine the frail but recovering international economy.

Unlike the Eurozone

Over the past year, the US, despite opinions and forecasts to the contrary, has weathered rough economic forecasts with brassy conviction. Much of the Eurozone, in countries like Italy, Spain and Greece, has suffered a paralyzing series of severe economic shocks equivalent to nation-sized bankruptcy. Not a few times have financial earthquakes punished the Eurozone and pushed it to the brink. International creditor and banking confidence has been rattled by high unemployment in pivotal Eurozone countries and the reduction of hundreds of billions of dollars of European consumer debt to “junk” status.

Of course, no one can argue that the United States and the Eurozone haven’t fallen upon similar hard times. Historically, however, there has always been a major difference in the outlook of American consumers and Europeans-American confidence usually prevails over hardship. That appears to still resonate with a bipartisan Congress this week: Americans move forward.

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A Bailout to Eliminate Credit Card Debt

It seems like everyday now that we learn about a government sponsored bailout of another major corporation. Many smaller businesses, as well as individual people, are left asking where is their bailout from the unscrupulous lending practices of the banks and credit card companies.

In recent years, consumers have been encouraged to use their credit cards for everyday purchases, including groceries, fast food meals, and even the morning cup of coffee on the way to work. All of these purchases, plus the interest and fees added on, have only built up a vast pile of debt for the average cardholder.

This is not much different than the debt built up by corporations, who now have their hand out, asking for help. And the government seems very willing to provide that help, at the long-term expense of the American taxpayer.

There is however, a bailout of sorts for personal credit card debt. This is not a government program, no taxpayer dollars are used, and you will not hear about it on the nightly news. In fact, there is actually no money involved in this bailout. Through debt elimination, a person can legally and completely discharge 100% of their debts from credit cards and personal loans. All without a new loan, subsidy, or government takeover.

For someone with too much debt, a personal bailout could be the difference between bankruptcy, and financial stability. Yet no agency or congressional handout is available for the average consumer. Instead, individuals need to take some initiative and go help themselves, without seeking a stimulus package that will probably never come.

Secured debts such as mortgages and auto loans, do not qualify for an elimination program. Yet without the burden of the monthly credit card payments, money would be available to pay for housing, transportation, and other obligations. Keeping people in their homes and driving their cars is imperative to improving the economy.

There are many options when it comes to debt relief. Not every program is a good fit for all people. Most people believe that negotiating or settling debt is the fastest way to pay them off. A debt elimination program is not a settlement program, nor is it a form of bankruptcy. It also will not sting your credit report for the next 7 to 10 years.

For anybody looking at this option, it is important that some time be dedicated to understand how and why the debt can be relieved. It is not difficult to grasp this concept, nor is this information an obscure secret. It is just information that is not given to us from our normal sources of news. The right information can set a person free from the bondage that the banks have put us into.

By taking personal control of your life and your debt, you will initiate your own personal bailout. A presidential order is not needed to accomplish it, and the taxpayer is not burdened with extra future debt.

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