This article discusses certain judges’ reluctance in granting deficiency judgments on residential foreclosures. Particularly, the effects categorical refusals to grant such judgments are considered. Potential effects on the lending market and available residential loans are identified addressed. Ultimately, a lack of deficiency judgments may lead to fewer loan products being available to homeowners and/or an increase in interest rates on full-recourse loans. In addition, the need for further research in the area is highlighted, particularly as it relates to the current economic situation. [More]

The United States is founded on the premise of equal protection. Equal protection is the scheme of legislated equality which encompasses notions of fairness, goodness, fraternity and social justice. It’s about maintaining a social stratification system which encourages any person to achieve their fullest potential by preventing the worst forms of social distinctions to arise. For years, members of our society, our elected officials and governing bodies have fought vigorously to implement programs and laws that promote this idea. In just our recent history, we have seen the passage of the Fair Housing Act, Title VII and The American’s with Disabilities Act. However, little has been done to combat the social inequalities that our financial institutions have created by the painstaking road blocks they have constructed to gain access to mainstream financial services. These hurdles have prevented valuable members of our society from gaining admittance to a world driven by ecommerce. They have been disallowed from reaping the myriad benefits that savings accounts and electronic banking afford to more financially endowed individuals. That was, until the Financial Service Centers of America (FiSCA) and NetSpend Corporation took it upon themselves to collaborate and create The All-Access NetSpend National Savings Program.[1] [More]

I. Introduction

The current global recession has experts around the world searching for a solution in a place never looked to before. For the first time, Asian economies are leading the way out of a global economic slump. While the United States and Europe have pioneered past recoveries from world recessions, recovery seems to have already begun in Asia with China at the forefront. Massive government stimulus and expansionary fiscal policies have spurred growth in Asia with other strong economic indicators seemingly providing a foundation to a full-fledged recovery. Despite a drop in exports, Asian economies have offset the decline in this major source of revenue by slashing interest rates, keeping savings levels high, increasing infrastructure demand and harnessing the potential for expansion in domestic consumer demand. Many Asian nations are net creditors [1], with significant current account surpluses supplied by capital inflows over recent years. Asia now has a comparatively high ability to lend and borrow, as opposed to most Western nations which are running high trade and fiscal deficits. [2] However, the long-term sustainability of this potential recovery is questionable due to the huge amount of government-backed investment and generous policy measures that cannot continue indefinitely. In order for these Asian economies, in particular China, to return to normalized growth, private investment needs to increase as well as domestic consumption. No longer can the world wait for the Western consumer to jumpstart the global economy. Increasing Asian domestic consumption is a necessary driver for getting the world out of this current recession. [More]

I. INTRODUCTION

The nationwide credit crisis has made the “American Dream” unattainable to most citizens. With lenders instituting rigorous requirements making qualifying for mortgages nearly impossible. The record breaking foreclosures and unemployment have added fuel to the fire, putting pressure on homeowners to reduce their asking prices. Many owners have been forced to sell at far below market value, accepting a large loss on properties that when purchased had high potential for profitability. However, the resurgence of lease-option agreements, especially in areas where foreclosure rates are high, has sparked hope for many sellers and buyers. [1] [More]

I. Introduction

On February 27, 2009, the United States government announced that it was taking measures that could result in it taking as much as a 36% equity stake in Citigroup, Inc.[1] This would make the federal government the largest shareholder in Citibank.[2] By converting $25 billion in preferred shares into common stock, the federal government hoped that the move would stabilize Citibank in a tumultuous market.[3] As a result of this move, a number of people have voiced a growing concern over the federal government taking further steps to nationalize other major financial institutions.[4] [More]

I. Introduction

Unless a new business owner is a millionaire or has an angel investor, a small business loan is almost always a necessity to get the business off the ground. The amount of labor that goes into starting a small business is a feat in and of itself. However, without the financial backing of a small business loan issued from a bank, all other efforts at starting the business may be fruitless. This article will discuss how to obtain a small business loan from a bank. First, it will discuss the preparation that goes into receiving a small business loan from a bank. Second, it will discuss ways to approach the in person meeting with a loan officer or bank employee. Third, it will discuss the pros and cons of different loan options. Finally, it will conclude by discussing how to manage debt throughout the process of starting a new business. [More]

Introduction

[A few short years ago, there was a country experiencing significant prosperity. The flow of credit within the economy was fluid, stock prices were at all time highs, and many people were becoming wealthy in due part to real estate speculation and appreciation. As the economic outlook in the real estate market was bright, banks began granting increasingly risky loans. Eventually the bubble burst. Inflated real estate market values began to decline, lendees found themselves unable to pay back their risky loans, and the credit markets froze. As a result, government intervention came in the form of subsidizing failing banks and businesses.]

In the middle of this financial crisis facing our country, one would assume this passage is referring to the United State of America. However, this is the very similar story of the Japanese housing bubble that burst and led to what is known as the “the lost decade.” This article will briefly describe the legislative responses taken by the Japanese government to address their crisis, compare those to any similar one’s being taken by the US government in response to its own, and comment which legislative actions may succeed or fail, and why. [More]

I. Introduction

The past few months have seen numerous financial frauds uncovered. Two of these frauds are particularly noteworthy. On December 11th, 2008, the largest of these financial frauds was unveiled when Bernard Madoff admitted to a $50 billion fraud through his firm, Madoff Securities.[1] On February 17th, the Securities and Exchange Commission (SEC) filed charges against Stanford International Bank relating to an allegedly fraudulent $8 billion certificate of deposit (CD) scheme.[2] Other alleged frauds have come to light, often in highly publicized and dramatic fashion.[3] These frauds suggest something is amiss in the markets. [More]

Introduction

Recent headlines that Wall Street investment banking executives have received billions of dollars in bonuses, just months after the federal government has given these same firms billions of dollars in bailout money, has greatly increased skepticism about acceptable methods of awarding bonuses. [1] President Obama condemned the awarding of these exhobirtant bonuses. "That is the height of irresponsibility. It is shameful. And part of what we're going to need is for the folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility." [2] However, many individuals on the flip side of the coin believe these bonses are imperative to the success of the banking business. [3] This article will discuss the arguments for and against seemingly inflated bonus plans by delving into the most common types of compensation plans and their relation to the current economic crisis on Wall Street. [More]

I. Introduction

While intellectuals, economists, bankers, and pundits try to explain the ins and outs of the economic downturn we are currently facing, many on "main street" are asking "what happened to make my 401k retirement savings account diminish so much in value since I looked at it in August?" The fact is that many hard working individuals have no idea what happened to cause the global economic downturn we are currently facing, and the explanations being put forth by most media outlets simply do not make sense to many people.

In trying to understand the situation, there are without question many factors that played a role. Trying to identify one overwhelming factor would be futile, however, this article will look specifically at the role deregulation played in the financial crisis. [More]