The subprime market crash has affected minority neighborhoods all over the U.S. Why? Because they were heavily targeted for risky high cost loans. With millions of Americans suffering from inflating mortgage payments due to adjustable rates, balloon payments and other unscrupulous sub-prime programs, many people are now in panic mode, fearing that their homes will be lost.
The subprime market crash has affected minority neighborhoods all over the U.S. Why? The reason is because they were heavily targeted for risky high cost loans. With millions of Americans who are suffering from inflating mortgage payments due to adjustable rates, balloon payments and other unscrupulous sub-prime programs, many people are now in panic mode, having recently lost their homes or living in constant fear that their homes will be lost.
United for a Fair Economy, a Boston-based economic policy group minorities put out a study about subprime mortgage situation. In a report called "State of the Dream 2008: Foreclosed" report, an evaluation of subprime lending during the past eight years, and a direct loss from defaulted subprime loans ranging between $365 billion and $605 billion is what is projected.
55 percent of the bad subprime loans are held by whites, while minorities hold the other 45 percent. Borrowers who are projected to lose between $71 billion and $122 billion are African-Americans, who account for about 20 percent of the total losses that are projected. Latinos are projected to lose $76 billion to $129 billion for the same period. This would total about 21 percent of the burden from the subprime defaults.
Rocco Basile, a product manager with Basile Builder's Group said, "It is bad here in New York, and especially in places like Brooklyn with a higher number of minorities.". "Our goal is to help answer questions and provide the community here with guidance and advice via seminars."
According to a January 26, 2008 Bloomberg subprime article, the communities of Bedford-Stuyvesant and Crown Heights in New York had a foreclosure rate of almost four times the national subprime figure of 6.89 percent in October of 2007. One ion four owners who had subprime mortgages in the 11233 zip code areas lost their homes. This was the highest number since March of 2003 according to the Mortgage Bankers Association in Washington. Bedford Stuyvesant and Crown Heights is mostly black, there were 194 foreclosures out of 770 subprime borrowers, according to Federal data.
It appears that many of these minority families had credit scores that led them to predatory loans with extremely high interest. According to a 2006 study of 50,000 mortgages by the Center for Responsible Lending in Durham, North Carolina, blacks and Latinos are 30 percent more likely to be charged a higher rate for a home loan than whites with credit histories that are similar. What's more, subprime loans were available to those borrowers with incomplete or bad credit and these loans carry higher interest rates than loans to people with good credit histories.
Sharp increases in subprime mortgage loan delinquencies and also the number of homes entering foreclosure raise important economic and social questions.
Invoice Factoring is Highly Efficient for Small Business
Today, many small businesses are being forced to cut expenses and manage their cash flow better. However, many small businesses, including the construction industry, can get by if they implement new billing and cash flow procedures like accounts receivable factoring.
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One major challenge facing almost any small business owner today is how to maintain and control positive cash flow. One of the least understood options for increasing cash flow is factoring, a great way to invest in and grow your business.
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Factoring has been around for more than 4000 years, since the beginning of trade and commerce. Accounts receivable factoring is also one of the most misunderstood financial tools available to small businesses today. In the U.S. factoring is becomming a popular method of financing, helping to improve the cash flow for businesses, especially in today's economy.
