1 The Bank Bail-Out: Saving America's Banks

Much is known about the near-collapse of the housing market and the financial ruin that followed some of America’s largest banks. The more disturbing story is not how America’s largest financial institutions nearly caused the largest recession in US history, but how in the midst of the federal government’s efforts to stabilize the financial industry, the people, whose houses were being foreclosed and the small businesses on main street that suffered, were left in the dust. By examining the issues surrounding the collapse of the housing market and the federal government’s response, it is clear that the regular Americans were sacrificed in order to save wall-street.

In 2006 a problem arose across America. All economic indicators showed that prices for individual homes were starting to go down across the board. In order to try to force housing prices to increase, the Bush administrations authorized the Fed to lower interest rates and change the rules that pertained to borrowing. These new rules allowed an increase in the number of sub-prime mortgages, mortgages issued to lenders who might have problems with repayment. The result was that many people who previously could not afford to own their own home were allowed take out a home mortgage loan, which caused home prices to increase to record heights. With high prices and record profits, home developers began construction on new housing projects with the hopes of taking part in the housing bubble.

However, government deregulation, the saturation of the market with new houses, and sky-rocketing housing prices coupled with unnecessary financial risks taken by banks caused the housing bubble to finally pop. Homeowners woke up to discover that the value of their home was substantially lower than when they had originally taken out their mortgage for the same house. Many homeowners, who under normal circumstances would not quality for a home mortgage loan and were intending to sell their homes for more than what it was worth, found that their home was upside down and began to default on their mortgage payment. Foreclosures hit a record high and banks found themselves with a set of sub-prime loans that were now worthless, resulting in record losses for the vast majority of American lenders. On the precipice of the greatest financial collapse since 1929, investors and lenders alike solicited aid from the federal government.

What was proposed by Secretary of the Treasury, Henry Paulson, and the White House to Congress was the Emergency Economic Stabilization Act, which included the $700 billion Trouble Assets Relief Plan (TARP). The intention was to create liquidity for banks and lending institutions to prevent their financial collapse and, in exchange, the financial institutions would eventually pay back the money borrowed from the federal government with interest once the institution became profitable again. Under the Obama Administration, TARP was extended to General Motors and Chrysler, and a separate fund was created to reconstruct Fannie Mae and Freddie Mac.

Though the EESA created stipulations for the restructuring of the financial industry in the United States, this bill, and any bill after the EESA on the federal level failed to establish a plan to help homeowners struggling with their mortgage payments or homeowners facing foreclosure. The bill also did not establish a fund to bail out small businesses that were directly affected by the housing market collapse. Appliance and furniture retailers as well as home construction companies were faced with huge profit losses, and many of these companies were forced to file for bankruptcy or close their doors permanently. Though state and civic governments have attempted to address the issue within their jurisdiction, no federal actions have been taken to help homeowners or local small business. Many of those on main street America felt betrayed by a White House and Congress that was elected to protect their interest, and instead passed legislation to save the multi-billion wall-street banks.

The truth of the matter was just that, the blame should not be placed on the homeowners or the banks, but the federal government that first deregulated the housing market then failed to assist struggling homeowners and businesses. The government traded long-term growth for short-term price hikes, a fateful decision that the American people struggle with today.

0 Fiscal Cliff and Housing

It seems that for now we have avoided the fiscal cliff which was supposed to take effect in 2013. It is considered as an economically damaging set of tax increases and spending reductions which is good news for the housing industry, but for how long? The enactment of H.R. 8 or the American Taxpayer Relief Act of 2012 has the following provisions; it has increased income tax, increase in capital gain and dividend rates, exemption and deduction phase-out for all individuals with high-income.It has made permanent the alternative minimum tax relief and has increased the federal estate, gift and generation-skipping tax.

There will also be an extension of certain tax breaks but for a limited time which is generally two years for various business credits, exemptions including new markets tax credit, work opportunity tax credit, and the exclusion of gain on the disposition of certain small business stock. Well, this extension from the Tax breaks are good for home buyers since it will help lessen the number of foreclosure and will help borrowers whose mortgage is upside down to stay in their homes. You may recall, that a law was signed in 2007 stating that debt relief modifications, foreclosures and homes in short sale were no longer taxable and it was supposed to end in 2012. Now, if these tax breaks were not extended, homeowners would not agree in putting their homes in short sale because they would then be facing the tax bill and they would also not agree to the principal reduction loan modification which is way more successful than any other modifications because it leaves the principal as is. This latest development in legislation would do “mostly” good for the people. It somehow prevented the massive tax hikes and deep government spending cuts which could trigger the country to go into recession again. About ninety percent of the new tax revenue which will be collected for the year will come from families who are earning more than 1 million dollar annually. Meaning, only 1 percent of the population will be affected.

However, the negative part of the deal would be; the act did not extend the 2% reduction in Social Security portion of the FICA tax collected from wages, so as a result, a worker who earns a total of $113,000 per Social Security ceiling for 2013 will see an increase in taxes from his earnings of $2,274 this year. If an individual’s income is above $250,000 then expect the tax rate on stock dividends to exceed the current 15% level. Explained as; each extra dollar earned as investment income which includes dividends and long-term capital gains are now subject to the 15% rate plus a 3.8% surcharge under the Affordable Care Act or the “Obama Care” making now a total levy of 18.8% on your income.

In two weeks time the Congress will meet again to raise the debt ceiling. Well, whatever the outcome would be, ordinary citizens are being called to act and let their voices be heard by calling their representatives and let them hear your thoughts on this before it takes effect on March 1, 2013.

About the Author:

Georges Kfoury is the founder and Chief Executive Officer of Leaderscorp Financial Inc. headquartered in Rancho Cucamonga, CA, a leading provider of mortgage financing dedicated towards providing affordable home loans. He founded the company way back 2003 from a ground level, without having the mortgage background. In spite of this, he was able to immediately take the company a level of generating annual income ranging from 8 to 10 million dollars.

1 What real estate agents can learn from Obama's Win

As you brainstorm ways to use the Internet to enhance your real estate business, think about President Barack Obama. In 2008, then-Senator Obama pledged that his presidential bid would be the first cyber campaign. That is to say that he would utilize computer and on-line technology in an unprecedented way. The result was spectacular. Not only did a young, nearly unknown first-time senator win the election, but he brought presidential campaigns into the 21st Century. It was obvious his 2012 campaign would expand on his previous success. The president's creativity should inspire you to consider applying Internet technology - social media, email, video, etc. - to your own real estate business needs.

Initially, the most obvious difference in Obama's 2008 campaign was its extensive use of email to build a communication network with supporters and potential supporters. The campaign used all media to attract voters to its website and, therefore, its email list. TV commercials, Web ads, You Tube videos and personal pleas lured people to the candidate's website, but they could not enter the site unless they gave up their email addresses. In addition, online fundraisers not only collected money, but also email addresses. Even traditional "retail politics" played a role as campaign staffers circulated at rallies collecting, you guessed it, email addresses.

As the presidential email list grew, so did its value. The list was used to solicit more donations, make important announcements, offer contests and get out the vote come election day. Plus, once the 2008 election was over, the list allowed the campaign to stay in touch with the electorate while building a foundation for the next election.

Such lists are versatile and powerful. In real estate, a list of potential home buyers and sellers is worth gold, and such a list could be built easily. Email addresses should always be collected on websites, at open houses, and during telephone calls. And these addresses will continue to be useful, even after a prospect purchases a home. Home owners are great for referrals, and post-sale feedback is always valuable.

In addition to the email list, you should immerse yourself in social media. Once just the realm of young people, sites like Facebook and Twitter now reach a wide selection of potential customers. Plus, these demographic-based networks make it much easier to reach your best prospects. It is target marketing times 100. Just as the Obama campaign focused in on the voters most likely to not only agree with the president, but also to take action and actually vote, you can use a professional Facebook page or Twitter account to zone in on people you can help, or at least people who can help you.

You also should consider creating your own software. In fact, it could be said that this was one of the most effective strategies of the Obama campaign. For 2012, the campaign created a technology field office staffed by skilled Silicon Valley supporters with advanced coding and program-design talents to literally build web-based programs customized to the campaign's specific needs. Among the custom programs built were a one-click text message fundraising protocol and a unique volunteer organizing interface. These days, with affordable coders available to hire online, a program customized to your unique needs could be most helpful.

Still, even if you would rather not build your own program, the online possibilities are endless. Not only can you find many web apps to help you with the basics - like online faxing, website building, and electronic signature software - there are a wide variety of online resources geared specifically to real estate. Sites offer all-in-one real estate marketing assistance, data mining and even automated "for sale" commercial makers.

Even video, which was difficult to use not so long ago, is easily available now. Most computers not only record video, but also feature easy-to-use video editing software. Now anyone can make a video and post it online.

President Obama was smart enough to use every tool available to him to make his campaigns successful. You should do the same. Creative use of online technology will not only expand your customer base, but also give you an edge against your competitors who are missing the boat. Well, missing the boat for now.

2 Pros and Cons of the Health Care Reform

Health care reform is among the most highly controversial topics in society today. Whether you're satisfied with your health care, hate your health care, or have never given a thought to your health care coverage, the information overload may have prompted you to take a closer look at your health care plan and perhaps ponder what you would change and what you'd hate to have taken away.

Of course, those choices aren't necessarily in your hands, as the recently passed health care reform legislation have etched public preferences - as seen through the eyes of politicians - into law, at least for the time being. Depending on who you talk to, the health care reform laws fall somewhere between the greatest and the worst government actions in recent memory. The reform regulations provide something different for everyone, so the only way to truly assess the value of the reform's effects on you are to research and judge for yourself.

One of the primary complaints of the health care reform legislation is that it is unconstitutional - obviously a pretty big concern. Specifically, critics claim that the individual mandate, a provision requiring uninsured Americans to buy government-approved healthcare, violates the freedoms provided by the Constitution. According to George Mason School of Law professor Ilya Somin, giving the authority to force decisions on individuals could lead to "unlimited congressional power to mandate personal behavior." This would be a troubling trend to promote, as limiting government power over individuals is a cornerstone of the American Constitution.

Another apparent flaw in the health care reform legislation is that despite its claims to reduce the federal deficit, it may actually expand it. One NewYork Times editorial noted that the purported savings were merely "fantasy," because the Congressional Budget Office has to take