Adjustable rate mortgages and the mortgage crisis
Purpose – The purpose of this paper is to closely examine adjustable rate mortgages (ARM) made in Northwest Louisiana in order to provide a greater understanding of the causes of the high rate of defaults and potential foreclosures currently being experienced in Louisiana.Design/methodology/approach – The paper examines detailed information for all ARM recorded in a three‐month‐period.Findings – The paper finds that at least half of the loans have highly unfavorable terms with about a third having initial rates that are at least 3 percent higher than prime mortgage rates; these initial rates are likely to increase dramatically during future adjustment periods. Many borrowers also face high interest penalties if they pay back their loans before the first adjustment period. Also notable is the fact that only 7 percent result in foreclosure. While many borrowers receive unfavorable loans, relatively few loans are held for more than six years; a probable explanation is that the borrowers realize they have agr...
Financial Literacy Education Program Post Financial Housing Crisis: Community Based Financial Literacy Education Program
As Americans faced financial devastation resulting from the 2008 housing financial crisis, left them in a critical financial hardship. Many affluent suburban neighborhoods now resembled desolate ghost towns as families abandon homes in the middle of the night to avoid ugly snares and embarrassment (Bradford, 2011). Homeowners that once lived in upper middle-class communities achieving the American dream faced the horrifying reality of facing foreclosure, bankruptcies that will force themselves into financial ruin (Bradford, 2011). As a result of the financial housing crisis, 6.9 million homeowners faced mortgage delinquency causing financial institutions to begin foreclosure proceedings (Bradford, 2011; Crotty, 2009). This research focuses on the background to the problem, the underserved populations that were deeply impacted by the financial housing crisis and financial literacy education program that can assist the community toward financial recovery. Financial Literacy Education Program Post Financial Housing Crisis: Community Based Financial Literacy Education Program
Deliberative Democracy and the Resource Curse: A Nationwide Experiment in Tanzania
Oil and gas discoveries in developing countries are often associated with short-sighted economic policies and, in response, calls to insulate resource management from populist impulses. We report on a randomized experiment testing methods to overcome this apparent tension between sound resource governance and democratic politics. Soon after Tanzania’s discovery of major natural gas reserves, we invited a nationally representative sample of voters to an intensive public deliberation of policy options featuring nationally recognized experts and small-group discussions. Democratic deliberation reinforced the public’s strong preference for rapid spending of gas revenues, but also increased support for various prudential and economically orthodox measures, including independent oversight of gas revenues, limits on government borrowing, and selling gas abroad rather than subsidizing fuel at home. These effects were driven by deliberation per se, rather than a pure information treatment, and show no evidence of contamination by facilitatoror peer-effects in group deliberations. www.cgdev.org Justin Sandefur, Nancy Birdsall, James Fishkin, and Mujobu Moyo