Ok, so I procrastinated placing this post up…
The program 60 minutes is on a roll after lying dormant for several years. I always view it as the bookmark to my weekend after watching my dose of NFL on sunday afternoon. It began with the Obama interview and keeps on rolling.
I am very late to post this, but the clip on the “Mortgage Meltdown” from a week ago Sunday is more of the same but, but like cod liver oil, it’s probably good to take.
And Credit Suisse has initiated bonus compensation based on their toxic mortgage portfolio. Brilliant! Did someone say “skin in the game?”
And while we are talking about mortgages, there was a terrific article last week in the New York Times about mortgage-related compensation. That hits close to home in Manhattan and it’s impact on the real estate market. So much was paid out, based on essentially nothing.
Aside: What really is a buyer’s market?
Hi Amy the attorney! Nice to meet you last week.
Many fail to realize that there are millions of self-employed smaller businesses, who employ from 1-10 employees, that are holding these risky mortgages.
The upcoming defaults on these risky “Toxic Mortgages” will result in an increase in foreclosures. But worse, once these small businesses fail, the resulting loss of jobs will cause millions to add to the ranks of the unemployed. Note that self-employed business owners (16.2 million according to the SBA) employ between 1-10 employees.
So, here we have a major problem… Not only will these small business owners lose their homes, but there will be the resulting JOB LOSSES on their business failure. Note, although President-Elect Obama is stressing the need to create 3 million new jobs, we must understand that “JOB RETENTION IS AS IMPORTANT AS JOB CREATION”.
I would appreciate if you would consider the findings of a National Association for the Self-Employed (NASE) which I authored and was released on 11/21/08. The survey shows that things are going to get worse. But, on the bright side, there is something that we can focus on to help mitigate the tragedy.
The 2nd Wave of Foreclosures has made it to the mainstream Media. On Sunday, 12/14/08, CBS’s 60 Minutes aired a segment on “The Mortgage Meltdown”. But, they overlooked a critical factor that is illustrated by the NASE Survey.
CBS’s segment missed the fact that this next wave of Foreclosures of ALT-A and Option ARMs will dwarf the Subprime Mortgage Crisis. IT Will Take Self-Employed and Smaller Businesses who have these TOXIC mortgages. In fact, ALT-A, Option ARMS, Interest-Only, the TOXIC Mortgages were specifically marketed to the self-employed who fell prey to them.
The NASE survey at http://www.nase.org , was the first to provide compelling evidence of small business involvement in the upcoming toxic mortgage crisis. The survey was created by myself and Jung I. Song, CPA of BornsteinSong Consultants in Oakhurst,NJ.
According to this survey, it is estimated that 3,709,800 small business owners hold Alt-A and other toxic mortgages, and 1,279,800 are already delinquent as they have missed one to three or more monthly mortgage payments at mid-November, before the expected Resets that are scheduled to begin in 4th Quarter 2008 through 2012.
The resulting defaults will be the cause of the upcoming second tsunami wave of foreclosures and will take many homeowners, small business owners, and their employees at this critical time when our economy can ill afford it.
I would be happy to work with you to help bring this to light.
Samuel D. Bornstein Professor of Accounting & Taxation Kean University, School of Business, Union, NJ