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Government Make Billions From The Mortgage Crisis

Autor admin | 16.08.2008 | Category Uncategorized

The mortgage crisis has had a negative impact on everyone, not just homeowners. Elected officials are working hard to pass legislation that is designed to prevent future banking debacles. Unfortunately, history has proven that when legislators over-regulate banks that it tightens the reins on lending. This is done by raising the bar on what it takes to qualify for a mortgage or installment loan. Predictably, it’s the middle class that will feel the pinch more than anyone. Specifically, it’s the middle-class, self employed small business owner that be injured the worst.

Most people are aware that you can reduce your taxes by deducting expenses and qualified charitable contributions. What most people don’t realize is that small business owners live and die by those deductions. Tax rates have risen on the self employed more than any other segment in our society. To counter these tax hikes, legislators created more “loop-holes” write off’s and deductions for small business owners to use.

For this reason, small business owners rely on creative CPA’s to maximize their deductions in order to show less income and pay less taxes.There are nearly 23 million small businesses in America and over 35 million sole-proprietors and almost every one of them employ savvy CPA’s to keep them in the black. The draw-back is that by doing this most self employed borrowers are unable to prove enough income on paper when applying for a loan or a mortgage.

Traditional mortgage lending practices of yester-year required that borrower’s prove sufficient income when taking out a loan. Over the years, taxes have risen for small business owners at staggering rates, far above what they have for W2 employees. At the same time the self employed borrower’s “provable” income has dwindled proportionately. Under traditional banking rules most of the self-employed people wouldn’t be able to qualify for business loans or mortgages. This would ultimately force small business owners out of business and cripple our would economy.

This new business paradigm literally forced the banking industry to create lending products that catered to small business owners who could not prove all of their income. These products were called “stated” income loans and did not require borrowers who had good credit to prove their income. These products originally required good credit and sufficient assets in order to qualify for them. Responsible guidelines and common sense underwriting kept default rates on these products in line with conventional mortgages. Unfortunately, as competition for this segment of borrowers stiffened between lenders the stringency to qualify for these mortgages softened, thus the mortgage crisis.

It is exactly this type of loan that our law-makers are trying to do away with through legislation. The new mortgage bill being bounced around has specific remedies for irresponsible lending. Meaning, if a bank loans you money and it can be proven in court (attorneys like this law by the way) that the bank was irresponsible in doing so they could be penalized. The definition of “irresponsible” is did the borrower have the capacity to repay the loan, meaning did they prove enough income. This bill will kill stated income loans, period.

So where does this leave the responsible self employed borrowers who needed these loans to live and operate their businesses? This leaves them with higher taxes. Should this bill pass self employed borrowers will be forced to claim more income each year on their tax returns in order to qualify for car loans, mortgages and even business loans. This will negate any of the loop-holes and deductions they were promised in lieu of higher taxes.

This means the government will rake in billions in extra revenue as a result of this bill. For example, let’s assume that a small business owner claimed $40,000 in income last year after deductions and business expenses. If she was in a 40% tax bracket she would pay roughly $16,000 in taxes. Under the new banking guidelines that same business owner may have to claim $80,000 In order to qualify for mortgages, car loans and business loans. Assuming she’s in the same tax bracket, she would now have to pay $32,000 in taxes.

Multiply $32,000 by 23 million business owners and that’s one huge pay-day for Uncle Sam. You can bet that the Senators pushing this bill through congress are well aware of this left handed tax raise. You will never hear them mention it either, I wonder why?. You will hear about the naughty lenders that put good wholesome red blooded Americans in the street through predatory lending practices. You will never hear about the 20 million business owners who paid their mortgages on time and actually need these loans to stay in business.

Choosing Baby Names

Autor admin | 03.08.2008 | Category Home and Family, Inspiration

Choosing a baby name for your child is almost like choosing his identity. Ever heard about the association of a person’s name with his personality? That’s how our names really work. A name molds a person’s identity like a cookie-cutter. So, better get that best baby name for your son or daughter. Read on for some tips on how to provide that best baby name for your little angel.

1. Stop it already with the dictates of your family’s tradition. Choosing the right baby name does not have to always rely on what your elderly relatives deem to be the best baby name. It is your baby’s name, not theirs. So, better act like it. Once your baby is born he will be stuck with that baby name for life. That means it’s not wise to just settle for any baby name that will suit your grandma’s or auntie’s taste.

2. Take a look of a picture of his future. You don’t want your baby to be always called with a monicker that will forever ridicule him or will allow his playmates to make a big laughingstock out of him, right? Research about the meaning of the baby name you are eyeing to give to your baby. Don’t consider Beelzebub as a prospective baby name just because you heard it from a TV show and you find it cute. Don’t use Rodelfa just because a certain Mexican TV show’s hunky lead actor is called Rodolfo. Just plainly saying yes to your gutfeel, thinking of the people that pops into your head upon hearing somebody spout a certain name, trying to follow a fad by naming your baby a certain celebrity’s (sometimes notorious) or NOT THINKING AT ALL in giving your precious one his or her baby name are huge no-nos!

3. Consider reading the initials of the baby name you are planning to give your baby. Make sure they don’t stand for anything funny, disturbing or something utterly stupid. Christine Sue Irving? What will happen on the next episode? Alvin Stephen Stuart? He’ll surely remember not to get near any hole. Fran Ursula Catherine Klein? Uh-oh! See? Can you imagine the sickening situation you may put your child into when he or she grows up?

4. Go check your family tree once and for all. Some can’t still get away from some traditions regarding baby name decisions, especially when they have a special bond with a certain family member that they want that person’s name to be a part of their baby’s name. If your planning to still follow the tradition of putting a part of your elder relatives’ names on your baby’s name, you have to know whether anybody else in your family use that name too. You don’t want to confuse people when they’re calling a name that’s owned by two. Ask around.

5. Don’t go for the overkill. Being too creative on thinking of a baby name can backfire, I’m telling you. Examples are too unique spellings. It will be hard for the kid to keep on spelling his or her name to people who only know the common spelling of such name.

6. Decide with your partner in coming up with the best baby name for your sweet baby. It wouldn’t be nice to be always blamed when people ask who chose that awful baby name, right? Okay, kidding aside. Sharing on this kind of decision-making is a good way of furthering your bond as a couple, not to mention the possibility of coming up with a better baby name. Remember that the “two heads are better than one” thought also applies to dealing with the troubles of finding the most suitable baby name for your baby.

Sound, appeasing relatives and friends and avoiding embarrassing initials and discovery of disgusting meanings are some of the major concerns that should be considered in your quest for the perfect baby name. You might find them a bit taxing. But in the long run, you’ll see that doing your homework will make your baby thank you when the right time comes. Happy baby naming!