By D.C. Fawcett, Business Building Coach to the Foreclosure Industry

When real estate investors evaluate their options for securing deals and making profits, there are several things that may come to mind. Whether its owning rental properties, fixing up properties in disrepair, or working short sales, the business of real estate is a proven winner. 

It’s also no secret that mortgage lending training just doesn’t set you up for success like it used to. Long gone are the refi boom, the various loan options for even credit challenged clients, and the plethora of high LTV loan products that you could offer to your clients. In short, it’s tough out there.
You may be wondering what you’re going to do and in what direction you want to go with your career. After all, you’ve had formal mortgage lending training, have attended mortgage seminars, and also see the profit potential in the real estate business that transcends the current economy.

As someone who has experience in mortgage lending training and who I’m sure pays attention to the news and realizes how many foreclosures are out there right now, aren’t you ready to learn how you can profit from the current real estate economy and, in doing so, earn 10 times what you would make for simply originating a loan?

After all, unless I’m terribly mistaken, marketing in the mortgage broker business has become extremely competitive, and it doesn’t matter how much mortgage lending training you’ve had. Instead of fighting over the few high credit clients out there that also have down payment funds, wouldn’t you like to learn how to again work with the types of clients who you used to work with years ago?
These clients need your help and they need it in a different way than before. There is tremendous profit in working with preforeclosure clients when you are working with a proven system that gets results. It all starts with training.

Quality foreclosure training can impact those of you in the mortgage broker business. This is not yet another example of repackaged mortgage lending training, nor is it a mortgage seminar. In fact, this is something completely different from the mortgage lending training that you may be more accustomed to.

What’s different about it is what makes it great. I hope you’ll consider what may be the best education you’ll ever receive, and it has nothing to do with traditional mortgage lending training or issuing loans! When you commit yourself to formal real estate training, your pursuit of real estate investing  as a complement to your mortgage lending training will be more productive and more rewarding. I wish you the very best in success in all of your investing pursuits and in business as a whole.

Technorati Tags: mortagage lending

Anti Poverty in USA

                          Even the wealthiest nation in the world like the United States does not escape the problem of poverty. This paper takes a critical look at poverty and anti-poverty policies in the United States. In this paper, I have argued that poverty is caused by several factors. This paper also discusses the liberal and conservative perspectives for reducing poverty in America. The conservatives have focused on individual factors such as wide wage gaps, breakdown of family, racial factors and other reasons while the liberals have focused on the structural transformation of the American economy to explain the persistence of poverty.  Since 1960, both the federal and state governments have been responding with policies that address the problem with mixed results. In this paper, I have analyzed the policies and have also recommended the possible ways to deal with this intractable nature of poverty.

                   According to Sen (1981), ‘the poor are those people whose consumption standards fall short of the norms, or whose income lie below that line’. The word "poverty" suggests destitution, an inability to provide a family with nutritious food, clothing, and reasonable shelter. Over thirty-six million Americans live below the official U.S. poverty line (Blank, 2007). This means a family of three earns less than less than $ 16,000 or a single individual earns $10,300 per annum (Blank, 2007, p. 17). Millions more struggle each month to pay for basic necessities, or run out of savings when they lose jobs or face health emergencies. Job cuts, high rates of unemployment, foreclosures and high food and gas prices continue to stimulate policy formulation designed to improve the condition of the poor.

                     Poverty is integrally associated with misery and suffering. The lost potential of children in poor households and the lower productivity and earnings of poor adults are all intertwined with poor health, increased crime and broken neighborhoods. Childhood poverty typically leads to poor health care and high crime neighborhoods. Persistent childhood poverty is estimated to cost the United States $500 billion each year, or about 4% of the nation’s gross domestic product (Blank, 2007, p.1).

                    One in eight Americans lives in poverty and poverty in the United States is far higher than in many developed nations (Rebecca Blank, 2007, p1). Inequality has reached record high. The richest 1 percent of Americans in 2005 held the largest share of the nation’s income (19%) since 1929 (Rebecca Blank, 2007, p. 2). At the same time the poorest 20% of Americans held only 3.4% of the nation’s income (Rebecca Blank, 2007, p.2).

                    Colorado in spite of being surrounded by the beautiful Rocky Mountains and experiencing a cool, mountain climate has many homeless people. Scholars have identified that, a growing number of single parent households, a shortage of jobs for lower wage workers and a low rate of high school graduation have contributed to the growth of poverty in Colorado. The Colorado poverty rate has increased from 9.2% in 2000-2001 to 10.6% in 2005-2006 while the poverty rate of United States has increased from 11.5% in 2000-2001 to 12.5 % in 2005-2006 (Center on Law and Policy, 2006, p.1).  Most of these ill-fated poor people suffer from mental and health problems. 

Causes of Poverty

                        Policy analysts are trying to explore numerous perceived direct and indirect causes of poverty in the United States to formulate effective policies to alleviate poverty. The work of scholars such as Corley (2003), Sowell ( 2004), Iceland (2006), Jencks (1992), James Tobin (1993) and others have shown that the intractable nature of poverty is a result of not any one factor but of the interaction of a variety of causes. The breakdown of family and other social causes as well as the structural changes in the economy, have all contributed to society’s failure to eradicate poverty inspite of ardent efforts by policy analysts.

                   Individual Explanation of poverty mainly stresses the attitudinal or motivational factors and human capital factors. Thus lack of motivation among indigents causes poverty. Generous welfare programs sometimes affect the mind-set of recipients and they prefer to stay at home and enjoy the benefits rather than work outside. Murray (1984) argues that individuals prefer to remain on welfare because of insufficient motivation to come out from public welfare programs.

                  Formulation and proliferation of policies to alleviate poverty has been a major concern of the United States Government since 1960. Educational attainment is necessary to get a high paying job. Elementary school education, as well as lack of adequate skills and motivation among indigents to come out of the situation is the major causes of poverty. People well equipped with technical skills get high salaried jobs while people who are school drop outs get low pay on an hourly basis. During the 1960s when the then- President of United States Lyndon Johnson began to implement the United States ‘war on poverty’, he placed great emphasis on education (Jencks, 1992). The Lyndon Johnson administration even invested in programs like Head Start and occupational training to upgrade the skills of the poor and also to prevent future generations from working in low-paying jobs. Scholars like Sowell (2004) and Corley (2003) have emphasized individual level factors as the central causes of poverty. They argue that a person’s compensation is based on his or her educational qualification and marketable skills. Sowell (2004) argues that the lack of appropriate skills has affected the ability of many indigents to climb out of poverty. He also argues that there has been an increase in the poverty rate of unskilled Americans, who have lost jobs to Asian immigrants. Corley (2003) also supports the above argument and regards ‘lack of educational attainment’ as one of the entrenched sources of poverty. Low quality education from poorly funded inner-city schools results in few marketable skills which leads to low-wage jobs and other miseries associated with it such as less ability to pay for housing, food, clothing, medical care, bad neighborhoods, funding problems for schools, and increased risk of serious illness (Corley, 2003). 

                          Many scholars have argued that structural changes are the primary reason for the persistence of poverty in the United States. Structuralists emphasize issues such as joblessness, discrimination in education, institutional racism and economic transformations in explaining the causes of poverty. Scholars argue that the inability to provide decent paying jobs for some American families and the ineffectiveness of American public policy to reduce poverty are basically the result of structural failures and processes. Poverty is rooted in the structure of American society. Rank, 2004 supports the above view and argues that lack of human capital tends to place individuals in a vulnerable state when events and crises occur. The incidence of these events like loss of a job, family break-up and ill-health often result in poverty. These ill-fated people unable to handle these situations often end up in paying more. Scholars also argue that the acquisition of human capital is strongly influenced by the impact of social class on this process (Rank, 2004). Apart from poor family, race and gender also play a role in the acquisition of human capital (Mark Robert Rank, 2004).

                          Globalization, the expansion of credit markets leading to greater indebtness and foreclosures leading to recession in 2008 all point to the growth of poverty.  Iceland (2006) primarily focused on economic factors and has argued that poverty is also the product of deindustrialization. As the U.S. shifts from a manufacturing, industrial society to a service-oriented, high-tech society, many of the blue-collar jobs that required little education but paid well are disappearing or are being outsourced. Rural areas, such as Appalachia, suffer losses of mining jobs, and cities such as Detroit lose many manufacturing jobs to automation or overseas factories. Some people are unable to follow the jobs or commute to work are left in neighborhoods without employment or tax-basis to support needed social functions, such as schools, public transportation, police departments, and so forth. Others simply cannot find jobs because of the shift towards a service-based economy; in economic terms these people are structurally unemployed due to the changing skills needed. Tobin (1993) supports the above viewpoint and emphasizes on the disappearance of jobs in the 1900s as the main reason for the country’s failure to eradicate poverty. Recent employment data shows that the US housing slump and the crisis in America’s credit markets are threatening to increase poverty levels. Isidore (2008) mentions that the job losses  are widespread, with the battered construction sector losing 51,000 jobs and manufacturing employment falling by 48,000 in the year 2008 . Retail employment dropped by 12,000 jobs, and business and professional service employers cut staff by 35,000. The unemployment rate jumped to 6.1% in September from 4.9 % in January (Bureau of Labor Statistics, 2008).

                         Kelso (1994), argues that over the last forty years, there has been a major shift of American firms first to the west and then to the south. Part of this shift was due to the rise of the Cold War and the decision of the government to enlarge U.S. military power (kelso, 1994). He argues that as America elected to invest more in defense and in the aerospace industry, cities like Seattle and Los Angeles on the West Coast began to boom while the growth of a high technology and information based technology led to the growing affluence of California and the San Francisco Bay area. Later with the expansion of inter-state highway system and growth of jobs, markets were created in the south.

                         Iceland (2006) also argues that although the service sector of the economy has generated millions of jobs, but again polarized earning distribution based on educational attainment separates better paying jobs from poorer paying jobs. He supports a Marxian analysis of class conflict and exploitation and emphasizes on business owners favor hiring inexpensive labor to maximize profit. This also accounts for the inflow of cheap labor to the United States from Mexico and other countries. Greater access to credit has put cars, computers, credit cards, and even homes within reach for many more of the working poor. But this remaking of the marketplace for low-income consumers has a dark side. Roubini notes that, "Having access to credit should be helping low-income individuals, but instead of becoming an opportunity for upward social and economic mobility, it becomes a debt trap for many trying to move up (Grow and Epstein, 2007).

                          Inspite of public assistance and wide initiatives taken by both Federal and State governments, poverty still exists. Meticulous analysis of the situation and effective formulation of policies is needed to solve the problem of poverty in the United States. Scholars like Rank (2004), Blank (2007) and others have shown that the United States Government spends fewer funds addressed towards poverty than any other industrialized country. Thus a major structural failure is found at the political level (Rank, 2004). Most European countries provide a wide range of insurance programs, unemployment assistance, and wide universal health coverage along with considerable support for child care (Rank, 2004). Such social programs are far more generous than those in the United States (Rank, 2004). While, low-income families in the United States work more than those in other countries, they are still not able to make up for lower governmental income support relative to their European counterparts (Blank, 2007, 141-142).

                          The gross disparities among impoverished people in the United States along racial lines have led many scholars to speculate that institutional racism is responsible for much of the poverty in the United States. Racial discrimination in employment and   education contribute to the growth of poverty. Some scholars like Massey and Denton (1993) interpret the statistics in terms of institutional racism while others like Kelso (1994) interpret the statistics as evidence of deficiencies and suffering of blacks.   In spite of efforts to remove racism, slavery and Jim Crow segregation, Massey and Denton (1993) argue that racial segregation still exists and that the fundamental cause of poverty among African Americans is segregation. They argue that segregation has created and perpetuated a black underclass by limiting educational and employment opportunities. Massey and Denton (1993) have shown that Blacks were shown homes in racially mixed areas or areas adjacent to predominantly black areas.

                           Also, changing patterns of family formation are more pronounced among racial and ethnic groups. Family patterns are also one of the causes of poverty in the United States. There is a wide gender gap in wages. In 2004 the median income of FTYR male workers was $40,798, compared to $31,223 for FTYR female workers (DeNavas-Walt et al, 2005) Pearce (1978) argues that ‘poverty is rapidly becoming a female problem’. Iceland (2006) supports this statement and showed that in 2000, the female poverty rate (12.5%) was 26% higher than the male poverty rate (9.9%) (Iceland, 2006). According to Iceland, women have fewer economic resources than men, and they are more likely to be the head of single- parent families. It also leads to the greater likehood that single, divorced or widowed women will be poorer than their male counterparts because of less social security income or other retirement income in addition to higher female life expectancies. Women’s lower wages, lower retirement benefits and the increasing number of single mothers have led some scholars to talk about the “Feminization of Poverty.”

Federal policies

                       After the Second World War, by 1963, creation of jobs by President John F. Kennedy’s tax policies could not remove the problem of poverty. Poverty was still recognized as a major national problem. President Lyndon B. Johnson’s War on Poverty led to a host of programs that included Medicare, Medicaid, Food Stamps, Aid to Families with Dependent Children, and others. These entitlements eventually consumed half the federal budget and could not alleviate poverty. The U.S. economy had been devastated by the recession of 1979-83 when the United Statess manufacturing infrastructure was shattered by the Federal Reserve’s skyrocketing interest rates causing unemployment to shoot up by sixty-five percent in four years (Cook, 2007). By the end of the 1980s the economy was in another recession, leading to the election of Bill Clinton who in 1992 replaced the incumbent George H.W. Bush. The investment boom of the 1990s was fueled by foreign capital lured in by the Treasury’s strong dollar policies. Jobs were created as the dot.com bubble expanded, trade barriers fell, and utility trading giants like Enron took off. NAFTA was enacted to promote free trade, welfare-to-work brought low-income women into the job market, and the Earned Income Tax Credit was extended. The party ended when the stock market crashed in December 2000 and millions of people lost their retirement savings and other investments. Recession was returning even as George W. Bush was being declared president by the U.S. Supreme Court in December 2000. The economic crisis deepened after the September 11, 2001 attacks when $1.4 trillion in wealth vanished during the worst five days of the stock market since the Great Depression (Cook, 2007). Cook (2007) argues that today, poverty is becoming a national catastrophe. Cook (2007) argues that from 2002 through 2006 the economy was floated by the housing bubble, with many lower income people getting into homes of their own through the proliferation of sub prime mortgages. With the financial woes in late 2008, many American citizens are left with inflated home prices and no way to pay for them.

                      The 1960’s policy initiatives and declaration of ‘unconditional war on poverty’ by the then president Lyndon Johnson marked a discrete change in the federal government’s willingness to intervene for the purpose of improving the economic situation of poor Americans. Despite the billions of dollars spent on programs like CETA (Comprehensive Employment Training Act), The Manpower Development and Training Act, Head Start, and the Elementary and Secondary Education Act, the government efforts to deal with the origins of poverty have met with minimal success. During this period, implementation of the Social Security old-age program insured virtually all retired workers against the risk of outliving their savings. The Social Security Act of 1935 sought to protect the incomes of those who did not work because of age or a poor economy by establishing a federal framework for unemployment insurance, old-age benefits, and assistance to women. In early 1964, the two most pressing priorities of President Johnson’s antipoverty agenda involved passing a massive tax cut designed to stimulate the economy and organizing a task force to shape the ‘War on Poverty’. The Economic opportunity Act (EOA) signed by Johnson created a long list of programs designed to help individuals develop marketable skills, political power, and civic aptitude. But this anti-poverty legislation oversaw other programs like Community Action Program, Job Corps, VISTA, Head Start (1965), Legal Services (1965) which were not included in its framework. While extensive programs like the Food Stamp Program, Medicare for elderly, Medicaid applied to qualified poor residents, the Elementary and Secondary Education Act for poor students overshadowed the EOA. The Higher Education Act eased the financial burdens of millions of college students. The Civil Rights Act opened up new spaces in the American marketplace, while the Voting Rights Act did the same for the political marketplace. The Fair Housing Act established an important base of law to combat housing discrimination. As a result the EOA slowly lost importance. Again, Murray (1984) argues that welfare benefits had soared so high so as to make living in poverty a meaningful option for the poor. Even Burton (1992) has supported the above viewpoint and argues that the programs have done more to cause poverty than to alleviate it.

                          When Nixon assumed power, he tried to deal with poverty in a more direct way than emphasizing social programs. . Although President Nixon expressed dislike for much of the War on Poverty, his administration responded to public pressure by maintaining most programs and by expanding the welfare state through the liberalization of the Food Stamp program, the indexing of Social Security to inflation, and the passage of the Supplemental Security Income (SSI) program for disabled Americans (Rank, 2004). The Nixon administration also endorsed a “New Federalism” in which the federal government shifted more authority over social welfare enterprises to state and local governments. His plan to implement the ‘Family Assistance Plan’ (FAP) consisted of various income provisions, work provisions, and training provisions for those below the poverty line (Rank, 2004). It failed to pass the Senate much like the ‘Programs for Better Jobs and Income’ initiated by President Carter in later years.                                       Welfare reform continued as a focus of federal policy debates even after the legislative defeat of FAP. Even though a cash ‘Negative income Tax’ (NIT) for all poor persons never passed, the Food Stamp program provided a national benefit in food coupons that varied by family size, regardless of state of residence or living arrangements or marital status. The number of AFDC recipients increased from about 6 million to 11 million and the number of food stamp recipients, from about 1 million to 19 million during the Nixon administration (Danziger, 1999, p. 8). Danziger (1999) also argues that as higher cash and in-kind benefits became available to a larger percentage of poor people, the work disincentives and high budgetary costs of welfare programs were increasingly challenged. The public and policy makers came to view increased welfare recipients as evidence that the programs were subsidizing dependency and encouraging idleness.

                        Despite the failure to enact a guaranteed income program, both the number of recipients and the amount of money spent on welfare programs increased substantially during the 1970’s (Rank, 2004). Rank (2004) has given an overview of Reagan’s policies and noted that Reagan emphasized individual action unhampered by government interference, rejected the social engineering of the 1960’s and also supported federalism, that is, returning power to the states rather than centralizing them within the federal government. Reagan tried to address the problem and set the tone for welfare reform that occurred in 1990 during his successor’s administration. The Reagan administration thought eligibility for welfare benefits had increased so much, that many persons who were not “truly needy” were receiving benefits. The Reagan Administration opposed simultaneous receipt of wages and welfare benefits. Rather, it proposed that welfare become a safety net, providing cash assistance only for those unable to secure jobs.

                    The Earned Income Tax Credit (EITC), enacted in 1975, provides families of the working poor with a refundable income tax credit (i.e., the family receives a payment from the Internal Revenue Service if the credit due exceeds the income tax owed). Thus the EITC raises the effective wage of low-income families, is available to both one- and two-parent families, and does not require them to apply for welfare. The maximum EITC for a poor family was $400 in 1975 and rose to $550 by 1986 (Danziger, 1999, p. 14). The 1986 Tax Reform Act increased the EITC so that by 1990 a low-income working parent received a maximum credit of $953 (Danziger, 1999, p. 14). The number of families receiving credits increased from between 5 and 7.5 million families a year between 1975 and 1986 to more than 11 million by 1988 (Danziger, 1999, p. 14). Danziger, 1999 argues that as the expanded EITC supplements low earnings, it became easier for policy makers to emphasize welfare reform policies that could place recipients into any job, rather than training them for “good jobs.” Thus he argues that if a nonworking recipient took a low-wage job, a substantial EITC could make work pay as much as a higher-wage job would have paid in the absence of an EITC.

                         The Family Support Act (FSA) of 1988 expanded the scope of the AFDC program for two-parent families, instituted transitional child care and Medicaid for recipients leaving welfare for work, and added funds and required states to establish programs to move greater numbers of welfare recipients into employment. When the welfare rolls jumped in the late-1980s and early-1990s, from about 11 to about 14 million recipients, dissatisfaction with welfare again increased ( Danziger, 1999).    

                        President Nixon identified the two main economic problems, inflation and unemployment, that justify the need for economic recovery to the American worker. Reagan has emphasized despair caused by unemployment combined with high inflation. Reagan’s rhetorical construction of welfare recipients and the welfare system was aimed at reducing anxiety among Americans caused by increasing taxes, inflation and the continuous fear of losing jobs. To end this victimization, Reagan proposed a plan for economic recovery (Rank, 2004). Apart from cutting government spending, specifically spending on social programs, Reagan also proposed to have State governments assume control of Aid to Families with Dependent Children (AFDC) and the food stamps program in exchange for the Federal Government control of Medicaid. Although this proposal failed to reach the Congressional floor, his presentation of the proposal to exchange AFDC and food stamp program with Medicaid made poverty a local concern (Mark Robert Rank, 2004).  

                       Liberals and conservatives still disagreed on other goals of welfare-to-work programs. Liberals thought welfare reform should expand opportunities for welfare mothers to receive training and work experiences that would help them raise their families’ living standards by working more and at higher wages. Conservatives emphasized work requirements, obligations welfare mothers owed in return for government support whether or not their families’ incomes increased (Mead, 1992). 

                       In later years President Clinton’s approach also emphasized empowerment as a way of helping welfare recipients and to accumulate more savings without being penalized and expanding the earned income tax credit (Blank, 2007). By the mid-1990s, the focus of policy concern shifted from fighting poverty to reducing welfare dependence. President Clinton’s signing of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (the PRWORA) ended the entitlement to cash assistance and dramatically changed the nature of the social safety net. The Act created the Temporary Assistance to Needy Families Program (TANF). TANF began on July 1, 1997, provides cash assistance to indigent American families with dependent children through the United States Department of Health and Human Services (The Center for American Progress Task Force on Poverty, 2007).  Danziger, 1999 argues that each state can now decide which families to assist, subject only to a requirement that they receive “fair and equitable treatment.”  In instituting a block grant program, the PRWORA granted states the ability to design their own systems, as long as states met a set of basic federal requirements. The bill’s emphasis on ending welfare as an entitlement program, places a lifetime limit of five years on benefits paid by federal funds, and also aims to encourage two-parent families and discourages out-of-wedlock births. In granting states wider latitude for designing their own programs, some states have decided to place additional requirements on recipients. Although the law placed a time limit for benefits supported by federal funds of no more than 2 consecutive years and no more than 5 years over a lifetime, some states have enacted more stringent limits. All states, however, have allowed exceptions with the intent of not punishing children because their parents have gone over the time limit. Federal requirements have ensured some measure of uniformity across states, but the block grant approach has led individual states to distribute federal money in different ways. Certain states more actively encourage education, others use the money to help fund private enterprises helping job seekers. The PRWORA offers no opportunity to work in exchange for welfare benefits when a recipient reaches her lifetime limit of 60 months of federally-supported cash assistance. But the reform has certain limits. States may not use federal block grant funds to provide more than a cumulative lifetime total of 60 months of cash assistance to any welfare recipient, no matter how willing she might be to work for her benefits, and they have the option to set shorter time limits. States can grant exceptions to the lifetime limit and continue to use federal funds for up to 20 percent of the caseload. The extent of work expectations has also been increased. Single-parent recipients with no children under age one will be expected to work at least 30 hours per week by FY 2002 in order to maintain eligibility for cash assistance (Danziger, 1999, p 20). States can require participation in work or work-related activities regardless of the age of the youngest child. Thus PRWORA emerged from research that sought both to reduce poverty and welfare dependency (Danziger, 1999).  In the 1990s, following Clinton’s call to “end welfare as we know it,” policy makers escalated their demands for recipients to work and reduced government obligations toward and funds to serve them (Danziger, 1999).

                     When Bush took office in 2001, the U.S. was experiencing a national surplus, unemployment and poverty had been on the decline for years, and the economy was booming. Now, almost six years later, poverty is on the rise, healthcare coverage is on the decline, and the country is faced with the largest national deficit in history. Lower middle class families are slowly slipping below the poverty line and the poorest are becoming even more destitute. Most of these families are headed by women.

                      President Bush has extended the TANF. There has been a general economic stimulus policy initiative during the Bush administration but nothing targeting low income Americans has been enacted. President Bush signed the economic stimulus package (H.R. 5140) into law with the hope that it will provide a much-needed boost to the lagging economy. The package includes tax rebates for individuals, tax breaks for businesses, and a temporary increase of the Federal Housing Administration loans from $417,000 to $729,750 (White House report, 2008). More than 130 million people are expected to get tax rebates ranging from $300 to $1,200 per household for individuals earning $75,000 or less and couples earning up to $150,000 (White House report, 2008). While the stimulus package will provide much needed financial help to millions of people, it fails to target those most in need as it will not include an extension of unemployment benefits, energy assistance, food stamp benefits, or fiscal relief to states for Medicaid.                       

                  From the above analysis, the question arises whether poor are responsible for their own condition. The above analysis implies that recipients become dependent and lethargic due to vast welfare measures. Scholars such as Murray (1984) and Kilty and Segal (2006) have emphasized on individual factors. They argue that welfare measures and lack of spirit and motivation among indigents contribute poverty. Danziger, 1999 argues that during the Nixon era increased welfare measures encouraged idleness. Kilty and Segal, 2006 also argues that poor people can come out into a state of self-sufficiency from dependency by learning proper work attitude and skills. Kilty and Segal, 2006 argue the importance of welfare reform and a ‘tough love’ approach would ultimately help the poor by making them conscious of their condition and forcing them to take their own responsibility. Bill Clinton’s emphasis on ‘personal responsibility’ and measures to ‘end welfare as we know it’ in 1992 all supports the above argument.

                     Due to the implementation of TANF, the numbers of people on welfare have decreased. As a result more funds are accumulated. In 1996 the number of ADFC recipients was 12,644,076 while in 2001, the number of TANF recipients was 5,91, 811 and the poverty rate also reduced from 13.7 to 11.3 ( Kilty and Segal, 2006) and while in 2008 it is 1,628,422  ( US Dept of Health and Human Services). The share of single mothers on welfare (based on administrative caseload counts divided by population numbers) rose from 38 percent in 1969 to 48 percent in 1980, but had fallen to 30 percent by 1998 ( Kilty and Segal, 2006). These caseload changes are widespread, with every state in the country experiencing substantial caseload decline. This decline has been widely hailed by politicians as an indication that policies designed to reduce dependence on public assistance and move less-skilled adults into the labor market have been extremely effective ( Blank, 2007). But however Blank argues that declines in welfare do not affect the poverty rate. The poverty rate in 2007 was 12.5 percent, increasing slightly from its level of 12.3 percent in 2006. The poverty rate increased for four straight years from 2000 to 2004. In 2007, the poverty rate was 1.2 percentage points higher than it was in 2000 (Blank, 2007).     

States welfare initiatives

                      Most states took a significant decision about reform, and this decision was sensible in light of state goals and experience. A few states did not seriously make reform policy. New York was so deeply divided that it took no serious decisions about AFDC (Mead, 2002). Alabama and Missouri were pushed into reform by federal action and appeared to have little welfare policy of their own (Mead, 2002). In several other Southern states (Florida, North Carolina), policymaking appeared to be casual and personalized, with the governor or legislators offering reform plans with, apparently, little inquiry or evidence behind them( Mead, 2002) . Texas policymaking was incoherent as the state claimed to pursue work first but based its policy on an experimental program and focused far more on education and training (Mead, 2002). States have always emphasized on reform. But sometimes lower contribution towards these plans result in total failure of the program. Mead (2002) argues that in Florida and Georgia, however, officialdom was dragged into reform but showed little commitment to it. In Arizona and California, the agency or major localities had been heavily committed to a skills-oriented approach to welfare and resisted the shift toward work first. In Texas, welfare reform was a lower priority to administrators than rebuilding non-welfare employment programs and other initiatives. In Colorado and New Jersey, local agencies had a history of defiance toward the state government, and this prevented them from fully endorsing reforms decided in the capital. Mead (2002) argues that inspite of establishment of Employment Service (ES), a federally-funded job placement agency, and training programs under the federal Job Training Partnership Act (JTPA), poverty rate did not improve. After national welfare work programs were first enacted in 1967, the ES engaged in welfare practices. But because the ES’s routine stressed serving job seekers who came to it voluntarily, it generally performed poorly with welfare clients (Mead, 2002). These jobseekers came to it on a mandatory basis, as a condition of receiving aid. To succeed with them, the agency had to enforce work but also support employment with special services. The ES often found both these roles uncongenial (Mead, 2002). The ES was denoted to the role of contractor to welfare and later in 1988 the Workforce Investment Act (WIA) merged the ES, JTPA, and other non-welfare work programs. But this merging also created confusion. The problems included lack of clear procedures to refer clients to WIA, to serve them there, or to report results back to welfare. The states that lacked coordination and inadequate management information systems (MIS) were Massachusetts, Rhode Island, Tennessee, Washington, West Virginia, Florida, Georgia, and Tennessee.      

                         Colorado’s public reform has been associated with decline in poverty rate. By the close of 2000, Colorado’s unemployment rate dropped to 2.6 percent, personal income showed steady gains, state welfare cases declined dramatically, and State legislators wrestled with an estimated $833 million revenue surplus (Colorado Fiscal Policy Institute, 2001). But inspite of all the above facts poverty still persists as expenses like child care, out-of-pocket medical expenses and geo-graphic differences in housing costs increased. The increases occurred even after adjusting for income support such as tax relief, food stamps and school lunch programs, housing subsidies and energy assistance. A report published in 2001 by the Colorado Fiscal Policy Institute determined that a single parent with two small children living in Denver County would need to earn an annual salary of approximately $39,924 in order to meet their basic needs such as housing, food, health care, childcare and transportation without public or private assistance. Even child poverty rate is high in Colorado. About 180,000 children, 15.7 percent of the state total was living in poverty in Colorado in 2006, a 73 percent increase since 2000 (Frosch, 2008). The state of Colorado purchases childcare for income eligible families through the Colorado Child Care Assistance Program (CCCAP). The state allows individual counties to set the purchase price of childcare and make payments to providers from a combination of parental fees and federal, state and county funds. However, the Colorado Office of Resource and Referral Agencies (CORRA) found in a 2001 study that the average county payment fell below 75 percent of market value (Colorado Fiscal Policy Institute, 2001, pp 9). As a result counties forced providers to subsidize the cost of service to low-income families, which many were simply unwilling to do when limited slots could be filled with families that could afford to pay full rates. Other providers that chose not to simply refuse service to CCCAP families saved money by limiting the number of children on CCCAP that they would accept, cutting programs, or reducing workers’ wages. All of these actions limited availability and sacrificed quality of care to low-income children. Poverty still exists in Colorado despite initiatives to alleviate poverty as too many working families lives with incomes below the poverty line and more families earn wages simply too low to afford their basic needs. The Colorado government started the Common Good Caucus in 2007 to develop a 2009 agenda, emphasizing on K-12 education and determined to bring technologies out of the laboratory and into the marketplace by investing $4.5 million dollars in bioscience industry, supporting the Clean Energy fund to reduce high family utility costs , creating the Colorado Solar Incentive Program with $2 million to provide rebates for photovoltaic and solar thermal systems to help Coloradans join the new energy economy and cut their utility bills ( State Rep. Kerr Andy, 2008). Poor people cannot pay the full cost of heating and lighting their homes. Governments and social service agencies have long assisted low-income ratepayers in paying their bills through such programs as the Low Income Home Energy Assistance Program (LIHEAP), charitable fuel funds, levelized billing, discounts, home weatherization, energy efficiency, energy usage education and debt management. If all Americans live in weatherized and energy efficient homes and have the income to pay their full share of utility bills, all other ratepayers would save nearly $6 billion in poverty costs, including fuel assistance, lifeline and other rate assistance, weatherization and efficiency costs, the costs of late payments and service disconnections (Oppenheim and MacGregor, 2007).      

Recommendations  

              From the above analysis it is clear that poverty remains pervasive due to the economic system, social stratification and welfare measures. According to Iceland (2003) on one hand, economic growth and technological changes contribute to increase in wages and overall standard of living. Economic growth accompanied by rising education levels improves the condition of people. On the other hand, the market economy often exerts a contrary effect on poverty levels (Iceland, 2003). To maximize profits, businesses usually seek to pay low wage to workers which increase inequality and poverty. Again policy may increase or decrease the harmful effects of inequality. Combining the factors emphasized by both liberals and conservatives, poverty is multifaceted. I believe that a strong national effort would alleviate poverty. Employment opportunities for all so that that worker and their families can avoid poverty, meet basic needs and save for the future. Increasing hourly wages would definitely improve the condition of these people. A smaller share of unemployed low-wage workers, receive unemployment insurance benefits. I believe that states (with federal help) should reform “monetary eligibility” rules that screen out low-wage workers, broaden eligibility for part-time workers and workers who have lost employment as a result of compelling family circumstances. Workers should use this period of unemployment and the money received from the Unemployment Insurance System and upgrade their skills and qualifications. Thus adults should have opportunities throughout their lives to connect to work, get more education, and live in a good neighborhood and move up in the workforce.

                         Child care assistance to low-income families and emphasis on K 12 education would definitely reduce the rate of poverty in the United States.                          Low-income youth hardly attend college than their higher income peers. Pell Grants play a crucial role for lower-income students. Simplification of the Pell grant application process, and encouragement of institutions to do more to raise student completion rates would definitely improve the condition. Expansion of Pell Grants would make higher education accessible to residents of each state. The states at the same time should also develop strategies to make postsecondary education affordable for all residents. Expansion of the Saver’s Credit would encourage saving for education, homeownership, and retirement. As a result all Americans would have assets that would allow them to weather periods of volatility and to have the resources that may be essential for upward economic mobility. Apart from Saver’s credit, expansion of Earned Income Tax Credit would raise incomes and helps families build assets. Thus there should be opportunity for all so that children grow up in conditions that maximize their opportunities for success.

References:

Blank Rebecca (2007); Poverty to Prosperity; Center for American task force on Poverty;

www.americanprogress.org/issues/2007/04/pdf/poverty_report.pdf - Similar pages

Colorado Statewide Homeless Count (2007), School of Public Affairs, University of Colorado, denver.www.dola.state.co.us/cdh/Publications/Winter_2007_Statewide_PIT.pdf - Similar pages

Cook Richard (2007), Poverty in America

www.globalresearch.ca/index.php?context=va&aid=5905 - 61k - Cached - Similar pages

Corley Mary Ann (2003); Poverty, Racism and Literacy; ERIC Clearinghouse on Adult Career and Vocational Education

Danziger Sheldon (1999), Welfare Reform Policy from Nixon to Clinton, Institute for  for Social Research, University of Michigan.

De Navas-Walt, et al., “Income, Poverty and Health Insurance in the United States: 2005.

Diana Pearce Diana Pearce (1978) "The Feminization of Poverty: Women, Work, and Welfare," Urban and Social Change Review.

Iceland John (2006); Poverty in America; University of California Press

Isidore Chris (2008); the Trillion-Dollar Mortgage Bomb,

money.cnn.com/2008/04/21/news/economy/fannie_freddie/?postversion=2008042103 - 66k –

James Tobin (1993); Poverty in Relation to macroeconomic Trends, Cycles and Policies; Cowles foundation discussion paper.

Garima Dasgupta
http://www.articlesbase.com/politics-articles/anti-poverty-688499.html

Business debt Negotiation has become more and more a popular option in recent years like the most successful debt solution in the market for any financial difficulties. People can apply for business debt negotiation or personal debt negotiation but one of the main problems nowadays is that the internet has lots of misinformation about these processes, causing people to distrust these programs, due to the huge amount of scams on the net.

- What is business debt negotiation?-

Business debt negotiation is a process by which businesses negotiate with their creditors to reduce the balance of their total amount of debt. Depending on the client’s circumstances, the creditors will decide what percentage the debt will be reduced to, the reduction can be as low as 40 to 50 percent. Once the creditor receives the funds the account will be zeroed out and your business will be debt free again.

- How does business debt negotiation affect the credit score? -

If you have been paying your debt on time and you are used to having your accounts current your credit score will surely be affected, and the business debt negotiation program will have a negative impact on your account, but there is one detail worth mentioning, before you attempt to apply for the business debt negotiation program, you see, before a creditor decides to see the possibility of accepting less than the complete balance as payment, your account must be in a delinquent state meaning that at least your business will have to be behind 3 months on monthly payments.

After your business has settled or negotiated every account and every deal has been paid then the account is closed and is reported as paid in full and the credit report will reflect a zero balance on each account. After that, each account of the credit report will begin to return to a number that is acceptable and eventually you will be able to obtain a mortgage, a car loan, or any other type of credit, once again. This happens generally a few months after finishing the whole process of the business debt negotiation.

- Is there any tax liability after applying the business debt negotiation program? -

When the creditor has already agreed to settle your account for less than the full amount, they are required by the IRS to report the canceled debt, if the amount of the forgiven debt is $550 or greater you may have to pay some taxes, although there is a possibility that you may not be required to do so if you can prove that you were “insolvent” at the time you finished settling your debts.

Here is some advice for those businesses that are suffering from debt and are thinking about applying for the business debt negotiation program:

Do not wait until your business has gone bankrupt, because there are several ways of helping you with your debts, although bankruptcy may seem very useful, it is at first, but like any radical solution it also brings lots of side effects that you will have to carry for several years to come. It is not easy to make decisions being a business entrepreneur, that is why you should always look out for the professional counseling that the business debt negotiation program offers. After successfully finishing the program you can enjoy of the learning programs that the business debt negotiation program has that will help you make decisions regarding your business financial future and will guide you both through the debt free road.

We have different articles on interesting topics and experiences from current and former clients with our programs. Take a look at related topics of different situations on Business Debt Negotiation that people can fall into and how to keep yourself a debt free person.

Check these links to learn more:

http://www.curadebt.com/settlement/business-debt-negotiation/business-debt-settlement-negotiation.asp

http://www.curadebt.com/about.asp

Debbie White
http://www.articlesbase.com/debt-consolidation-articles/business-debt-negotiation-settling-your-business-debts-120276.html

Duration : 0:0:0

Do you have a bad credit record yet want a mortgage on your new home? Well there’s good news for you and millions of others in your position. Till a few years back one couldn’t think of availing mortgage loans with bad credit history. But thankfully such situations are history themselves! A mortgage company for people with bad credit is no longer a rarity, in fact there are a number of lenders that specialise in this.

As a part of this growing trend, today there are a number of mainstream reputable mortgage loan companies which have also joined the business of providing those with bad credit mortgage financing. This is primarily because most finance companies for people with bad credit, have realized that providing credit financial services to such a segment is actually profitable if done the right way.

Mortgage companies for people with bad credit, are also known as sub-prime mortgage loan companies. These companies rely on FICO scores for determining the amount of credit a person is worthy of. Agencies like Experian, Equifax and Trans Union Corporation provide scores which are useful in judging the credit worthiness of a person. It is finally this score which decides for most mortgage financial services whether credit should be provided or not. A FICO score below 500 is considered a risky proposition.

Even if you easily avail refinance loan mortgage, there are certain uncertainties and problems to the same. Most mortgage refinance companies for people with bad credit try to take advantage of a bad financial position of the client and pressurise them into a high interest rate which can actually keep you in debt for long, ending up paying much more than necessary.

The down payment charge levied upon by a mortgage lender is specially punishing, since it can be up to even 30 % of the total amount of mortgage. While this sure makes repayment easier for the borrower, they also have to pay the high interest mortgage rates.

In spite of all this there is good news yet for those looking for refinance loan mortgage. With the line of distinction between good credit record and bad credit being gradually blurred, plenty of mortgage brokers are bowing down to competition and offering better rates & facilities to bad credit borrowers.

Check the Internet for loads of such information on mortgage finance company for people with bad credit. They offer the facility of online application forms, which makes your job easier and tells you fast if you qualify for a bad credit loan.

A mortgage company for people with poor credit that will offer affordable mortgage rate through refinancing mortgage is also just a click away. There are of course many unscrupulous entities operating as finance company for people with bad credit doing the rounds on the internet, and as such one needs to be careful. Do your research well before you zero in on a mortgage company for people with bad credit.

Allan Smith
http://www.articlesbase.com/mortgage-articles/mortgage-company-for-people-with-bad-credit-680740.html

When you think about it, there are only 2 things that people are looking for in Social Media. It does not matter if you are in real estate, mortgage banking, insurance, or even in marketing of some type. People are always looking for something.

You just need to make sure that you know what those things are.

Most people in the Social Media arena are progressive thinkers and progressive people. Most are ahead of the curve in the web 2.0 world, and most have a focus of being ahead of the pack. The early adopters of Social Media, which I am one, started on the Social media scene 5 years ago. There as not much there, but what was there, was used as best as it could be used.

People then, and people now, are still the same. They always will be. But in the Social media arena, they are looking for 2 things that will help them.

Help them feel better about whom they are. Help them feel better about what they do. And help them feel better about where their life is going. All people are in some way looking for that forward focus. That is why in the social scene, there are 2 things people seem to be seeking more than anything.

Only two.

1) CONNECTION.

Most people in Web 2.0 ville are looking for Connection. They want to connect with people, information, new ideas, new trainings, new events, new groups, new videos, but whatever they are looking for, they want to CONNECT.

Connection is part of the culture we grew up in. People in real estate understand the person want to feel emotionally connected to a house before they purchase it. People want to feel connected to a car before they decide to buy it. And people want to feel connected to something before they start building that bridge of trust with you. You must make an effort to connect in a way that they will respond to in social media.

IN Social Media Marketing, Connection is NOT Correction as so many people think. They are NOT looking to be told that their life is not any good, or is lacking. They are not looking to be told their home is too small for them. They want to Connect to something or someone that will make them feel better about themselves and where their life is headed. You do that in conversations on twitter, facebook, myspace, orkut, moli, LinkedIn, and the like.

They want to feel GOOD about a conversation with you, no matter the social network. They want to feel FOCUSED ON and Tied into a conversation that will help them feel more a part of something that can increase and enlarge their life and future.

CONNECTING with people is simply reaching out and taking their hand over the internet and letting them feel PLUGGED IN to something and someone that can help you connect to new possibilities and to new destinies.

THAT is simple and the truth. Keep the Connection authentic and real, and they will listen to what your conversation is about and start drawing closer to you and your message.

2) Elevation.

People want to feel like they are being lifted higher in their life. They want to feel like their life is going somewhere and means something. We all do. We all are looking for that special feeling that we are special, and as trite as that sounds, it is the truth.

What can you do to create that feeling that they truly believe they are walking on air?

Life them up by noticing something g they said that has helped you.

Compliment them.

Give them a kind remark about their efforts in what they are doing in Social Media.

Ask questions they might know the answer to show you appreciate their knowledge..

Send them new ideas on their passion.

Notice something about their conversation that you can totally appreciate and let them know about it.

Empower them with encouragement.

Thank them for learning something from them.

WHY?

It will make them glad they talked to you in Social Media. And they will remember you the next message, tweet, or conversation. They will move from the Awareness stage, to the Appreciation stage in Social Media.

As a realtor, you will see that they can start to trust you, and even start referring possible clients to you as people they know are moving out or into - your area.

Remember- it is NOT what you said. But how you made them feel by Connecting with them and Elevating their hope and future in the Social media Marketing arena.

blessings…doug

Doug Firebaugh
http://www.articlesbase.com/marketing-articles/social-media-marketing-training-the-two-things-that-everyone-is-looking-for-in-social-media-681829.html

There are certain loans for all types of property. One particularly interesting type of loan is a commercial mortgage loan to the owner of the property occupied. An owner of the property occupied is defined by the financing of capital Griffin (national leader of commercial mortgage loan services) as:

A property owner where the company holds at least 51% of the property.

Many business owners prefer to own the property that your business is located, as it gives them the ability to control its costs and earn some fiscal balance write. People in search of these commercial mortgage loans can be any type of business you want to control where and costs about their location. Apartment complexes, farms and mines are considered related to the investor and the properties do not normally qualify as owner-occupied, even if the owner lives in the house.

Commercial mortgage loans are usually produced by terms ranging from 5 to 30 years. Applicants are required to have an initial payment of at least 25% of total loan closing costs. Closing costs typically include assessment, environment, and inspection points and can usually run between $ 6000 to $ 12,000. Unless the plaintiff has challenged credit or other problems to the credit institution, their homes or other assets as collateral are not required. Any commercial loan applicant must be willing to provide the documentation the bank could require, including personal and corporate taxes, as well as the financial statements and a credit report on the borrower.

The companies that are trying to get owner occupied commercial mortgage loans should contact a commercial mortgage lender described Griffin as capital funding to discuss their particular situation. Keep in mind that the rules and regulations as well as interest rates and other policies related to the loan vary by lender and state. Be sure to contact commercial mortgage loan experts and report to you before applying for a commercial mortgage loan.

There are a much smaller number of lenders that offer commercial mortgage loans at a reasonable price and the conditions that exist today even 6 months ago to do their due diligence and in contact with a company that has a good reputation in the market.

Pro Bargain Hunter
http://www.articlesbase.com/mortgage-articles/commercial-mortgage-loans-for-owner-occupied-properties-674570.html

Duration : 0:0:0

Duration : 0:0:0

During the last weeks, I’ve been interviewing with a company, a new Internet Start-Up in Barcelona based on a Mortgage Lead Generation business model. In my research, I found some interesting things about this market that I wanted to share in this article.

The mortgage refinancing business model

First of all, I just want to clarify how this business model works. This model consists mainly on users filling their personal and financial data into a mortgage refinancing portal. Then the portal commits to send the user personalized offers (real offers from brokers or banks) to improve the actual conditions of the user’s mortgage. This service is usually free for the end user and the value created is clear: It basically saves you a lot of time in comparing different offers from different banks that are applicable to your specific financial situation. On the other hand, what these portals get from the end user is valuable information for banks/mortgage brokers: They have a potential customer interested in refinancing its mortgage, all his/her relevant financial data and the permission to send this information to banks/brokers to obtain the best possible conditions. This information is highly valuable for these institutions…. But how valuable?? Lets just make some rough calculations:

Given that the average commission on closing a mortgage deal is around 1-3% on let’s say an average home value of (let’s say) US$ 250.000, It means that what a broker earns on closing a mortgage deal is around US$ 2.500 – 7.500. Of course not all the leads sent to a broker end up in a refinanced mortgage, but let’s just assume that 10% - 20% of qualified leads (meaning people interesting in refinancing its mortgage, that took the time to fill many forms and questionnaires with personal information) end up in signing a new deal. This means that the maximum value of a “lead” for a broker (the same goes for a bank) would be around US$ 250 – 1500 (10% - 20% x US$ 2500 – 7.500). Anything below this, means margin for the broker. Depending on each broker’s ability to close deals, the quality of the leads, competition and other factors, each broker would be willing to pay a % of these maximum values per lead.

Two of the first and most succesful companies within this industry are lendingtree.com and lowermybills.com. For more information about Lowermybills, you can read the LowerMyBills Case Study.

Expensive Keywords

The first thing that caught my attention was that some keywords in this industry, keywords like “Mortgage refinance”, “Credit remortgages” or “Refinancing mortgage” are amongst the highest paying keywords in Google’s Advertising Network. What this suggest is that this market has become so competitive that has drove the price to one of the highest paid keywords in Internet advertising. It also suggests that at this superhigh price (around US$ 40 per click) the companies dedicated to mortgage lead generation still make money. Therefore, either they have an amazing conversion rate or they earn really a lot for each lead they generate, either for a mortgage broker or directly to the banks.

A simple calculation would be:

If the conversion rate of these keywords is, let’s say 10% (assuming a very high rate), it means that any company in this industry should at least make US$ 400 (US$ 40 / 10% = US$ 400) to break even… This figure is consistent with the ones obtained in the firs part of the article, where I got a possible value range per lead that went from US$ 250 – 1.500.

Opportunity for “arbitrage”

Assuming that the U.S. Mortgage refinancing market is already a mature market (and it’s safe to assume that after the mortgage mayhem of the last years), another important point would be that there is an opportunity for arbitrage (and an opportunity to make a lot of money) in any market where the PPC’s of these keywords is still very low. For example, if you get the estimated cost for the keyword “Hipoteca” (Mortgage in Spanish) the CPC is still around 3€ (roughly US$ 5). If we assume that when the market for mortgage lead generation matures the CPC will be close to what it is in the US (around US$40), it means that someone, probably the first ones in the market that make it reasonably well, will make a lot of money. The same goes for any other market where the CPC of the main keywords is still very low.

Maybe Offline advertising is the answer in the long run

As a final thought, with CPC’s at US$ 40, thousands of different sites competing in a market with not much differentiation and a huge market base of potential customers (estimated at around 45 million homes), the key elements are in place to switch at least an important part of the marketing budget to regular offline advertising. When the PPC market gets that competitive, TV or radio campaigns could lead to a much lower cost per conversion.

View the full article at my blog MBA Internet Marketing Manager

Pedro Neira
http://www.articlesbase.com/online-business-articles/mortgage-lead-generation-business-model-exposed-how-mortgage-refinancing-portals-work-678519.html