Fed Rate Cut Does Little For Homeowners In US
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Neil Ebsworth
May 7, 2013, 8:45:03 AM5/7/13
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Article Title: Fed Rate Cut Does Little For Homeowners In US
Author: Neil Ebsworth
Word Count: 653
Article URL: http://www.isnare.com/?aid=238469&ca=Finances
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The interest rate cut of three-quarters of a percentage point by the Federal reserve yesterday, was part of another attempt to hold up the financial institutions on Wall Street from further speculation worries. The stock market took some confidence from the move and posted the largest one day gain on the Dow Jones index for quite some time. But as far as struggling home-owners are concerned, the rate cut has done little to ease pressure on their burden. In fact, by cutting interest rates and further weakening the dollar, the Fed had invited higher oil prices, increasing energy and transport costs at a time when most households are already feeling the pinch.
The cut in interest rates, which is the third in as many weeks, follows the demise of Bear Stearns, who were eventually bailed out and purchased by market giants JP Morgan for the poultry sum of $2 a share. Bear Stearns, who had been trading a year ago at nearly $150 dollars a share, fell victim to a run on their shares following rumours over their exposure to the sub-prime mortgage market and the extent of the losses they may have suffered because of it.
The only positives to come from this story are that the Federal Reserve was able to move quickly to back the takeover, helping to minimize the damage caused by the loss of confidence in the general banking sector. The negatives however, which will affect more on the average American worker through the resulting imported inflation that the lower dollar will bring, seems to reflect more on the political view of the current administration, who will bend over backwards to prop up the corporations at the expense of the man in the street.
And when your stoic republican commentator points towards the tax rebate that is about to be delivered to every household as an indication of what the government is doing for the average American in this time of need, don�t be fooled. The maximum $800 dollars rebate is more of a cynical move to help prop up the employment market before a presidential election than it is designed to combat higher gas, food and energy costs.
If the administration wanted to do more to help those affected by the current mortgage crisis they could start by suspending the ability of the banks to foreclose on homeowners by auto-computer programs. A large problem with the mortgage lenders at the moment is that they have out-sourced their administration to companies who are ill equipped or poorly trained to deal with the problems that are arising. These outsourcing companies never foresaw the numbers of cases that they would be dealing with and computerized most of their procedures to cut costs. What has resulted is computerized foreclosure, without consultation and where consultation occurs, it may already be too late to achieve a positive result.
If each case was required to be reviewed independently, it could be determined whether it was sold incorrectly to begin with and where possible it could be re-written so that those home-owners who were never going to be able to afford the true cost and were effectively swindled, could refinance under terms they may allow them to keep their home. This would, of course, create a back-up of cases, but this effective delay in foreclosing on peoples homes maybe the delay required to unravel the truths behind the companies that made billions of dollars profit from those who could least afford it.
If recent comment in Congress are anything to go by, then supposedly, the likes of Countrywide Financial did nothing wrong legally, in selling expensive financial products to the people least likely to be able to understand them, let alone afford them. Maybe Congress should spend its time more wisely in making laws making sure this type of mis-selling is illegal in the future.
About The Author: Neil Ebsworth is the founder of AMLASpain,http://www.amlaspain.com , the MLS for properties in Spain and with a home for sale in Mount Pleasant SC real estate in the US is keen observer of US Real Estate trends, http://www.amlaspain.com/p-charleston-real-estate.html
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=238469
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Please consider this free-reprint article written by:
Neil Ebsworth
*****************************
IMPORTANT - Publication/Reprint Terms
- You have permission to publish this article electronically in free-only publications such as a website or an ezine as long as the bylines are included.
- You are not allowed to use this article for commercial purposes. The article should only be reprinted in a publicly accessible website and not in a members-only commercial site.
- You are not allowed to post/reprint this article in any sites/publications that contains or supports hate, violence, porn and warez or any indecent and illegal sites/publications.
- You are not allowed to use this article in UCE (Unsolicited Commercial Email) or SPAM. This article MUST be distributed in an opt-in email list only.
- If you distribute this article in an ezine or newsletter, we ask that you send a copy of the newsletter or ezine that contains the article to http://www.isnare.com/eta.php?aid=238469
- If you post this article in a website/forum/blog, ALL links MUST be set to hyperlinks and we ask that you send a copy of the URL where the article is posted to http://www.isnare.com/eta.php?aid=238469
- We request that you ask permission from the author if you want to publish this article in print.
The role of iSnare.com is only to distribute this article as part of its Article Distribution feature ( http://www.isnare.com/distribution.php ). iSnare.com does NOT own this article, please respect the author's copyright and this publication/reprint terms. If you do not agree to any of these terms, please do not reprint or publish this article.
*****************************
Article Title: Fed Rate Cut Does Little For Homeowners In US
Author: Neil Ebsworth
Word Count: 653
Article URL: http://www.isnare.com/?aid=238469&ca=Finances
Format: 64cpl
Contact The Author: http://www.isnare.com/eta.php?aid=238469
Easy Publish Tool: http://www.isnare.com/html.php?aid=238469
*********************** ARTICLE START ***********************
The interest rate cut of three-quarters of a percentage point by the Federal reserve yesterday, was part of another attempt to hold up the financial institutions on Wall Street from further speculation worries. The stock market took some confidence from the move and posted the largest one day gain on the Dow Jones index for quite some time. But as far as struggling home-owners are concerned, the rate cut has done little to ease pressure on their burden. In fact, by cutting interest rates and further weakening the dollar, the Fed had invited higher oil prices, increasing energy and transport costs at a time when most households are already feeling the pinch.
The cut in interest rates, which is the third in as many weeks, follows the demise of Bear Stearns, who were eventually bailed out and purchased by market giants JP Morgan for the poultry sum of $2 a share. Bear Stearns, who had been trading a year ago at nearly $150 dollars a share, fell victim to a run on their shares following rumours over their exposure to the sub-prime mortgage market and the extent of the losses they may have suffered because of it.
The only positives to come from this story are that the Federal Reserve was able to move quickly to back the takeover, helping to minimize the damage caused by the loss of confidence in the general banking sector. The negatives however, which will affect more on the average American worker through the resulting imported inflation that the lower dollar will bring, seems to reflect more on the political view of the current administration, who will bend over backwards to prop up the corporations at the expense of the man in the street.
And when your stoic republican commentator points towards the tax rebate that is about to be delivered to every household as an indication of what the government is doing for the average American in this time of need, don�t be fooled. The maximum $800 dollars rebate is more of a cynical move to help prop up the employment market before a presidential election than it is designed to combat higher gas, food and energy costs.
If the administration wanted to do more to help those affected by the current mortgage crisis they could start by suspending the ability of the banks to foreclose on homeowners by auto-computer programs. A large problem with the mortgage lenders at the moment is that they have out-sourced their administration to companies who are ill equipped or poorly trained to deal with the problems that are arising. These outsourcing companies never foresaw the numbers of cases that they would be dealing with and computerized most of their procedures to cut costs. What has resulted is computerized foreclosure, without consultation and where consultation occurs, it may already be too late to achieve a positive result.
If each case was required to be reviewed independently, it could be determined whether it was sold incorrectly to begin with and where possible it could be re-written so that those home-owners who were never going to be able to afford the true cost and were effectively swindled, could refinance under terms they may allow them to keep their home. This would, of course, create a back-up of cases, but this effective delay in foreclosing on peoples homes maybe the delay required to unravel the truths behind the companies that made billions of dollars profit from those who could least afford it.
If recent comment in Congress are anything to go by, then supposedly, the likes of Countrywide Financial did nothing wrong legally, in selling expensive financial products to the people least likely to be able to understand them, let alone afford them. Maybe Congress should spend its time more wisely in making laws making sure this type of mis-selling is illegal in the future.
About The Author: Neil Ebsworth is the founder of AMLASpain,http://www.amlaspain.com , the MLS for properties in Spain and with a home for sale in Mount Pleasant SC real estate in the US is keen observer of US Real Estate trends, http://www.amlaspain.com/p-charleston-real-estate.html
Please use the HTML version of this article at:
http://www.isnare.com/html.php?aid=238469
*********************** ARTICLE END ***********************
- To distribute your articles go to http://www.isnare.com/distribution.php
- For more free-reprint articles go to http://www.isnare.com
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