.
Se.
In the News
Communities
in Crisis: Pushed Beyond the Economic Limit
Contact: Stephen M.
Apatow
Founder,
Director of Research & Development
Humanitarian
Resource Institute (UN:NGO:DESA)
Humanitarian University
Consortium Graduate Studies
Center
for Medicine, Veterinary Medicine & Law
Phone: 203-668-0282
Email: s.m.apatow@humanitarian.net
Internet: www.humanitarian.net
United
Nations Arts Initiative
Arts Integration Into Education
Url: www.unarts.org
Twitter: unarts
In the Spotlight
- Miller tells Congress: Loan crisis just starting (Des Moines Register, 3 November
2007):
Iowa's attorney general testified Friday
before the U.S. House Committee on Financial Services.Miller testified
before
the U.S. House Committee on Financial Services. "We are at the
beginning
of this foreclosure crisis, not in the middle, and certainly not at the
end,"
he said.
- New York Sues First American Unit In Probe of
Home-Loan
Appraisal (Wall
Street Journal, 2 November 2007): Appraisers' complaints about pressure
to inflate property values have risen, studies suggest. In a survey of
1,200 real-estate appraisers released this year, 90% reported being
pressured by real-estate agents, lenders, mortgage brokers and
consumers to adjust property values in order to allow deals to go
through, up from 55% in 2003, according to October Research Corp., of
Richfield, Ohio.
- Inflated home appraisals? Rings a bell (2 November
2007):
New York Attorney General Andrew Cuomo is charging Washington Mutual
and
a major real-estate appraisal firm with inflating home values
nationwide.
Bob Moon reports Marketplace looked into this -- over two years ago.
In
The News
Center For Responsible Lending: From 1998 to 2006, subprime lending
enabled 1.44 million people to become first-time homeowners -
but it led
to 2.37 million foreclosures, a net loss of nearly 1 million,
the
center reported.Set
up for a fall, New York Daily News, 28 March 2007.
Mr Dodd accused the Fed of being aware three years
ago that lending standards were slipping amid the credit boom fueled by
historically low interest rates. Yet the central bank encouraged the
spread
of precisely the sort of adjustable mortgages whose rates are now
jumping
higher, forcing overstretched borrowers into default and foreclosure. --
Fraudulent
lenders blamed for US crisis, Belfast Telegraph, 23 March 2007.
--
“This
rate is nearly double the projected rate of subprime loans made in
2002,
and it exceeds the worst foreclosure experience in the modern mortgage
market,
which occurred during the “Oil Patch” disaster of the 1980s. -- Losing
Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners,
Center for Responsible Lending, 19 December 2006.
Overview
Recently,
I had the opportunity to hear about senior citizens who are facing
unsustainable
economic challenges, that include loosing their homes. The recent
hyperinflationary
period (Wickpedia: U.S. Housing Bubble) has
encompassed
a focus to exploit vulnerabilities, and in the context of senior
citizens,
the trend appears to be in full swing.
While the U.S. housing market has now prompted a foreclosure crisis (Millions of foreclosures loom, NPR, 2 February
2007),
realtors in many regions are positioning
offers to purchase foreclosures that cannot be moved by the banks, at
70%
of today's inflation adjusted Fair
market Value (price to sell in today's market):
Wickpedia:
The definition of "fair market value" is found (in the specific context
of U.S. tax law) in the United States Supreme Court decision in the
Cartwright case:
The fair market value is the price at which the
property would change hands between a willing buyer and a willing
seller, neither being
under any compulsion to buy or to sell and both having reasonable
knowledge of relevant facts.[1]
[1] United States v. Cartwright, 411 U. S.
546, 93 S. Ct. 1713, 1716-17, 36 L. Ed. 2d 528, 73-1 U.S. Tax Cas.
(CCH) ¶ 12,926 (1973) (quoting from U.S. Treasury regulations
relating to Federal estate taxes, at 26 C.F.R. sec. 20.2031-1(b)).
Fair Market Value of homes across
the
United States are being adjusted to price that would facilitate sale
in current market conditions TODAY (abundant available properties,
including
foreclosures). For specific market information:
-- Zillow.com:
Real
Estate Valuations Online: Search by Address, Street or
Neighborhood,
City, State or ZIP.
-- Foreclosures.com:
Search by State, County or Zip Code: Listing of Foreclosures,
Preforeclosures,
Bankruptcies, FSBOs, Tax Liens.
-- RealtyTrac.com:
Search Foreclosures by City & State or Zip. Listing of
Pre-Foreclosure,
Auction, Bank Auction, For Sale by Owner, Resale Homes.
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But while this transition is taking place in many regions of the United
States, municipalities continue to reference hyperinflated housing
prices
in reassessments, placing an unsustainable burden on senior citizens, a
burden
that in some cases will force them to loose their homes.
But, as the Appraisal Institute
recently
testified to Congress, appraisers are under increasing pressure from
lenders,
mortgage bankers and real estate agents to "hit their number" when
appraising
property
Rather than come up with an independent estimate of a home's value,
appraisers
-- who are typically independent contractors -- say they are being told
to
base their estimate on a predetermined value.
The problem is so widespread, that more than 8,000 appraisers – roughly
10 percent of the industry – have signed a petition asking the federal
government to take action.
-- Appraisal fraud: your home at risk: Appraisers say
they're
being pressured by lenders to inflate their estimates of home values,
CNNMoney,
2 June 2005
See
also: Financial Crimes to the Public: FBI 2005 Report -
Mortgage
Fraud.
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Meanwhile,
municipal, state and federal programs are being asked to coordinate
initiatives
to soften the systemic challenges associated with this unprecedented
hyperinflationary
period. As some of the most vulnerable in our communities, the
needs
of senior citizens must be prioritized.
Resources:
-- American Bar
Association
Commission on Law and Aging: The ABA Commission on Law and Aging
(COLA)
is dedicated to examining law and policy issues affecting older
persons.
--
National Senior Citizens
Law
Center advocates before the courts, Congress and federal agencies
to
promote the independence and well-being of low-income elderly and
disabled
Americans.
-- Consumer Facts for Older Americans: Consumer
Law
Center.
-- SeniorLaw:
Elder Law & Legal Resources on the Web.
US
Federal Reserve Sets Up Crisis Center
In the Spotlight
- One Fix Too Many: John H. Makin, American
Enterprise
Institute, Monday, October 29, 2007.
- Central bankers got us in this mess, Financial
Times,
14 October 2007.
- What are offshore derivatives instruments?, The
Economic
Times, 18 October 2007.
- Worst Housing
Crisis Hits Since Great Depression, Real Estate News, 15 October
2007.
- Zimbabwe's Inflation Rate At Nearly 8000 Per Cent,
AHN, 17 October 2007)
Contingency
planning and risk management discussions are gaining momentum on the UN finance ministerial level.
[See: Contingency Planning: Year 2000 Conversion Global
Infrastructure
Analysis: Humanitarian Resource Institute.]
The
latest report by the International Swaps and Derivatives Association
(ISDA) shows that the total outstanding volume of all over-the-counter
credit derivatives increased from $US 3.5 TRILLION in 1990 to $US 63
TRILLION in 2000 and to over $US 283 TRILLION this year. The total
amount of exchange-traded and over-the-counter
structured financial instruments was 27.3 percent of global GDP in
1990.
This year it is 772.8 percent. The BIS has reported that the global
market
for derivatives has soared to a record $US 370 TRILLION in the first
half
of 2006, boosted by credit default swaps. - CurrentConcerns.ch:
November Issue, 2006.
[Note: 2007 Derivatives discussion encompasses $US 750 Trillion.]
In
January of 1959, the first date in this data series, the money supply
stood
at $292 billion. By February of 2006, it had grown 3,419 percent to
$10,276
billion. Since 2000 the money supply has grown 55 percent and it has
grown
by $764 billion in the just last twelve months.On March 23, 2006,
the
Board of Governors of the Federal Reserve System ceased publication of
the
M3 monetary aggregate and its components. -- M3 Money
Stock: Board of Governors of the Federal Reserve System:
The
derivatives challenge
(Financial
Policy Forum) is now in the spotlight, Hedge-Fund Borrowing is now being Examined by Fed, SEC
and
European Regulators (Bloomberg, 8 January 2007) and as noted the
following
article (US Fed Sets Up Crisis Center, FN Arena, 12 january
2007),
the US Federal Reserve is setting up a crisis center.
Senate Budget Committee, 18 January 2007: Federal Reserve Chairman Ben
Bernanke was asked when measures would need to be implemented to avoid
a catastrophic economic impact in the United States, his answer was 10
years ago. His
bottom line (Bernanke
warns of impending fiscal crisis, Times UK, 18 january 2006):
"We are experiencing what seems likely to be the calm before the storm."
Consumer Debt: Families In
Crisis
Bankruptcy Statistics: American Bankruptcy Institute
Influence
of Total Consumer Debt on Bankruptcy Filings
Trends by Year 1980-2005 - Statistics
Resources: American Bankruptcy Institute (ABI)
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