Tag Archives: firms
New Steps Towards Conclusion Of Loan Modification
The Obama government is now putting pressure on the mortgage firms to speed up the process of confirming the mortgage loan modification procedure for the numerous homeowners. Many applicants have criticized that banks and lenders are beating about the bush. They are not responding to the calls and applications from homeowners. The companies are losing their paperwork, or delaying evaluations.
The treasury department has initiated some new measures to speed up the loan modification procedure. Lenders are required file their attempts to finalize the loan modifications of homeowners who have accomplished the three-month trial period. Also, the department has asked the lenders to put up new resources to help new homeowners who want apply for home loan modification. More than 650,000 homeowners started with the Obama Home Affordability program. However, very few of these homeowners have shifted to the permanent program, despite the fact that they have successfully completed the ninety-day trial period. The administration is making every effort possible to accommodate the homeowners who have recently applied for mortgage modification to stop foreclosure.
Mortgage firms are required to submit a report on the homeowners who are on the verge of completion of their trail period, and a schedule to transfer the successful cases onto a permanent scheme. The service providers are also obligated to submit to the treasury department documents supporting the same, and inform their decisions to the respective homeowners. Lenders who participated in the program, but fail to meet the requisites may be penalized.
The home loan modification program came into effect in March, 2009. The government had pledged $75 billion into the project. Already, $30 billion has been invested. The plan focuses on lower mortgage payments, and save home of every possible homeowner in distress. Interest rates were reduced awfully low, and monthly installments were brought down to less than 31 percent of the monthly income of an individual. These adjustments will be made permanent once the homeowner is current on the loan for the three-month trial period. However, there are extensive complaints of homeowners being asked to verify their documents again and again. On the other hand, lenders have reported that they are overwhelmed by the response and hence, unable to keep track of the proceedings.
To help mortgage firms speed up the loan modification process, the administration said it will work with them to set more rigorous performance measures, such as average waiting time for borrowers, document management, and response time for successful applications.
Fast Cash
Cash is the most liquid asset for a business firm. While the proportion of corporate assets held in the form of cash is very small, often between 1 per cent and 3 per cent, its efficient management is crucial to the solvency of the business because in a very important sense cash is the focal point of fund flows in a business. In view of its importance, it is generally referred to as the life blood of a business enterprise.
Why does a firm need cash? There are two primary reasons for a firm to hold cash: to meet the needs of day-to-day transactions and to protect the firm against uncertainties characterizing its cash flows.
Despite its benefits, cash is an idle resource. The trade-off for cash holding is that you get liquidity but sacrifice profits by foregoing alternative investment options. That is why the financial manager should carefully control cash.
Short-term cash budgeting is the principal means by which cash is managed. Cash budgets, routinely prepared by business firms, are helpful in estimating cash requirement, planning short term financing, scheduling payments in connection with capital expenditure projects, planning purchases of materials, developing credit policies and checking the accuracy of long- term forecasts.
Firms use multiple short-term forecasts, of varying length and detail, suited to meet different needs. The commonly used designs for short-term cash forecasts are one year divided into quarters, or months and one month divided into weeks. A firm, hard pressed with liquidity crunch, may even prepare a weekly cash forecast divided into days. The point to be emphasized here is that these multiple formats serve different purposes and should not be regarded as mutually exclusive. The principal method of short- term cash forecasting is the receipts and payments method.