The increasingly ominous financial cloud looming over the housing market does not leave us feeling that working will make us secure. As pointed out by Michael Vizard, Channel Insider, tight credit means smaller budgets and fewer mergers and acquisitions. Of course this goes without saying. SMB’s currently slugging through the summer on slow, if any cash flow, with grander ideas of seasonal expansion will find the avenues of additional funding smaller an smaller. How many will fall victim? I never quite understood the reasoning behind low interest home loans when the source is NOT a real estate company.
Yet to embark on the 2nd American Dream, your own business, you need to put that same home up as collateral. I can hear the risk managers in the background growling already. And as for risk? Little thought was given to the new applicant signing up for a 2nd loan to cover the down payment which they clearly did not have for the initial purchase. Use that same reasoning when trying to upgrade your computer network too improve customer service an retain more paying clients, it falls on deaf ears. The raising rate of Foreclosures will eventually turn into Bankruptcies. Which now adds an additional black mark against anyone applying for employment an has a Credit Check run on them. So beyond the housing market this will also affect the employment possibilities of many talented individuals which companies are currently scrambling for. This blog’s recent posting, Alliance Bankcorp of Oak Brook, still has my hair [what little is left] in knots, because I’m sure there are more to come. An what happen to all the loans that of course were sold to other sources? an those not? New rates that force more foreclosures. What if anything is going to happen to the officers and said “salespeople” of such organization? Nothing. Talk about white collar crime. What kills me this is suppose to be a “regulated” business. Like the flow of money, they never used their own, their funding came from higher sources, say Federal Reserve. An no-one questioned the tactics or loans that were generated. What is this? Get what you can until they turn the water off, your hands are clean because someone “else” signed the agreement to pay. We continually hear stories of low unemployment rates and turn a blind eye to the many two income families with (2) jobs each. The cost of living or should we say survival, has risen so fast in the last 6 years alone the pace itself will bury many. Personally I learned my lesson in the 80’s when we had the first housing market debacle. In those nightmare times cash ruled and accordingly I have done without alot of new gadgets and additional toys.
Push my vehicles over 100k miles, started a garden that now feeds me in the summer months an make time for fishing. A Winnebago on the Mexican coast is looking pretty good.
On Monday September 10th, DuPage Bar Center – Glenn Stearns will host a seminar on “The Bankruptcy Abuse Prevention & Consumer Protection Act.” Just curious here … does abuse prevention apply to companies like Alliance Bankcorp?
Does the Act actually protect us against those snakes in suits that pass for financial executives? Still wondering about that …