Everyone wins in the Cash for Keys program (Troeh, 2009). The Cash for Keys program gives homeowners who are struggling to make their mortgage payments the opportunity to receive a lump sum of cash in exchange for vacating their properties by an agreed upon date with the lender. The homeowner agrees to leave the property in move in condition so that the lender may quickly take back the property and lost it for sale. The homeowner is released from all responsibility of the property and the bank saves thousands of dollars in legal fees. Cash for Keys was created to aid both homeowners and lenders in the mortgage crisis. The mortgage crisis is the result of an insufficiently regulated market (Brock, 2008). Low lending standards were a significant component of the mortgage crisis (Brock, 2008). Lenders made millions of loans to people to buy homes that they could not afford (Brock, 2008). It is estimated that these lending practices have cost lenders tens of billions of dollars (Brock, 2008). The inflationary housing boom meant that people who could not afford their homes were able to refinance or sell (Brock, 2008). Homeownership was a goal that former president George Bush encouraged to citizens by stating “We want everybody in America to own their own home” (Brock, 2008). An earlier policy to help homeowners was the Making Home Affordable Program. This program was President Obama’s administration’s strategy to help homeowners avoid foreclosure while stabilizing the country’s housing market and improving the nation’s economy (MakingHomeAffordable.gov). This program was implemented on April 1, 2009 and its objective was to lower monthly mortgage payments (MakingHomeAffordable.gov). The program required that the lender who originated the loan must refinance the loan (MakingHomeAffordable.gov). Not all homeowners were eligible for this program. A Short Sale was another program which aimed to help struggling homeowners with mortgages they could no longer afford. Short sales were a timely process which involved the listing of the property for sale (Elias). Potential buyers could offer a price for the property which was often significantly less than what the homeowner owed to the lender (Elias). A short sale was an attempt to avoid foreclosure or bankruptcy for the homeowner (Elias). Lenders could sue the homeowner for the difference between the loan and the selling price of the property (Elias). There was a tax consequence to short sales – lenders reported the difference to the Internal Revenue Service as taxable income and homeowners were required to pay income tax (Elias). This new problem led to the creation of the Mortgage Forgiveness Debt Relief Act of 2007 which changed how the difference was reported to the Internal Revenue Service (Elias). Short sales have tripled since 2008 to an estimated annual volume of 400.000 based on a data sample of single family residence short sale transactions (Dymi, 2010). Over half of all short sale transactions have been in four states hardest hit by the mortgage crisis: California, Florida, Texas and Arizona (Dymi, 2010). The Cash for Keys program offered hope for those who struggled with attempts to modify loans, list properties as short sales or dealt with harassing collections procedures (Harmon, 2011). The Cash for Keys program offered a bail out to the Homeowner instead of the banks (Harmon, 2011). It offered the homeowner the option to walk away from the home (Elias). The Cash for Keys program offers homeowners cash as an incentive to leave their homes in a timely manner (Brathwaite, 2011). The homeowner agrees to maintain the property and leave it in broom swept condition and also agrees to removing debris from the interior of the home as well as from the exterior (California Department of Real Estate). The homeowner also agrees to leaving all light fixtures, appliances and landscaping intact (California Department of…
Finance assignment Personal Cash Flow Paper
A private cash flow can assist to manage a person's funds by displaying a person's monthly net cash flow. Making a cash flow document will easily remind a person of preparing a budget. By documenting a person's expenditures and earnings a person can easily see where cash may be obtained from one cost and included in another to make life a bit more comfy. This will exhibit the steady earnings and deductions which are being obtained from your earnings…
The statement of direct and indirect cash flows are financial statements that companies prepare each month. Both methods report the cash flows differently but in the end each statement will result in the same amount. The operating activities provides a company with financial flexibility to invest in other parts of its business such as purchasing new equipment or paying off debt. Investing activities pertain to making capital expenditures such as new equipment. Financing activities relate to borrowing…
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Thinking about the Price-to-Earnings
Ratio in a Different Light
The P/E Multiple Is Not as Basic as You Might Think
March 12, 2012
Executive Summary: We break down the key components of a price-toearnings multiple and highlight some of the pitfalls investors may encounter
by using it incorrectly in the valuation process.
What is the purpose of such an article? The P/E ratio is so simple, right? It is
just the price of…
Cash Flow from Operations
7. Free Cash Flow By Quarter
In the month ending March 31st 2012, UA’s capital expenditures was -8.839 million dollars and cash flow from operations was -73.051 million dollars for a free cash of flow -81.89 million dollars. In the quarter ending June 30…
Introduction to the Statement of Cash Flows and its role and impact in
Student Name: LinLin Zhang
Instructor: Mark Taylor
Date: December 11, 2014
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Introduction to the Statement of Cash Flows and its role and impact in financial
Introduction to the Statement of Cash Flows and
its role and impact in financial reporting
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Introduction to the Statement of Cash Flows and its role and impact in financial…
17 May 2012
Chip off the Ole Block
Johnny Cash is known as one of the most imposing and influential figures in post-World War II country music, but this never would have happened without the influence from Hank Williams and Huddie “Leadbelly” Ledbetter.
Cash inherited many genres of singing from influences of his and mashed them all up and created his own subgenre. Most of the music genres he inherited were from Hank Williams such as cowboy music, traditional country, gospel…
What is a petty cash fund? List two ways a business would maintain controls over Petty Cash? List TWO procedures you might suggest to your manager regarding Petty Cash.
Petty cash funds are usually small funds of cash kept on hand for procurements or repayments and must be secured and documented to guarantee that thefts don’t arise. “Accounting for the petty cash fund involves recording transactions to (1) establish the fund, (2) recognize expenditures from the fund, and (3) replenish the fund…
Strategy, Ethics and Forces
1. What is Cash Connections strategy?
* Differentiate itself from competitors to gain the largest piece of the $40 billion dollars of paid lending that the United States industry has to offer, while adhering to government restrictions and meeting customer’s needs.
Reference: Thompson, Peteraf, Gamble, and Strickland. P. (2010). Crafting and Executing Strategy: The Quest For Competitive Advantage Concepts and Cases (18th ed…