Archive for the ‘Accounts Payable’ Category

As the media focuses on all the companies that are laying off employees or filing bankruptcy themselves, we should be looking at the people most affected by this crisis.

The number of foreclosure filings reported in the U.S. last month jumped 93 percent from July of 2006 and rose 9 percent from June, the latest sign that homeowners are having trouble making payments and finding buyers during the national housing downturn.

There were 179,599 foreclosure filings reported during July, up from 92,845 during the same period a year-ago, Irvine-based RealtyTrac Inc. said Tuesday.

There were 164,644 foreclosure filings reported in June.

The national foreclosure rate in July was one filing for every 693 households, the firm said.

Many of the people who are now caught up in this mess, did not do so intentionally. In fact, many lenders “stretched” the rules just so they could put more people in houses and now that line they bent is trying to straighten itself out. It’s a shame so many people are getting caught on the wrong side of the line.

I wondered this morning, what was going on with the HomeBanc bankruptcy debacle. Now I know.

HomeBanc Corp. will ask a judge Monday to approve a settlement that will aid worried Georgia lawyers who have dug into their own pockets to fund mortgage deals caught in the pipeline when the lender collapsed.

About $28 million worth of Georgia home loans were headed to closing when Atlanta-based HomeBanc filed on Aug. 10 for Chapter 11 bankruptcy protection.

About 134 deals closed, however, as HomeBanc’s checks began bouncing in the escrow accounts of lawyers who handled the company’s real estate business. Dozens of Georgia lawyers were set to take a major hit, since they had already shelled out cash to pay off sellers and old mortgages from those escrow accounts.

Small law firms whose names wound up on HomeBanc’s roster of unsecured creditors faced real trouble, since those escrow accounts are sacrosanct repositories for client funds.

So what’s going to happen because of the bounced checks? Who is going to pay the price for defrauding people? Oh sure, they want to fix it now, but it doesn’t change the fact that they wrote bad checks. What if you or I wrote bad checks? Yeah, I don’t think we’d be getting any deal out of it, that’s for sure.

The American Home saga continues.

American Home Mortgage Investment Corp. became the second-biggest residential lender to file for bankruptcy protection this year, adding to signs that late payments have spread to homeowners with good credit records.

The company sought federal court protection from creditors in Wilmington, Delaware, today, saying it had assets of more than $100 million and debts of more than $100 million owed to more than 100,000 creditors. The filing comes after the company announced Aug. 2 it would halt operations and slash staff.

American Home specialized in mortgages for people who fall just short of top credit scores. More than half a dozen competitors have declared bankruptcy this year as defaults spilled over from “subprime’” borrowers with the worst repayment records to those with more reliable payment histories.

“Their sources of funding have all dried up,” said Mark T. Power, an attorney who is representing some creditors in the case. ”This case is going to be very similar to New Century.”

New Century Financial Corp., based in Irvine, California, became the largest home lender to seek court protection from its creditors when it filed for bankruptcy in April. The company is now being liquidated. Melville, New York-based American Home also is probably going to be forced to liquidate, Power said in an interview Friday, after American Home told employees that it was planning to declare bankruptcy.

So how far with things fall before they pick up again?

[Source: Bloomberg]

Over the course of the next few months we are going to see a lot more news like this. Millions of people are facing an uncertain future, and with the industry heading the way it is, it’s not going to be pretty for anyone.

American Home Mortgage Investment Corp said on Tuesday it can no longer fund home loans and may liquidate assets, putting its survival in doubt and sending its shares plummeting 90 percent.

The development was the latest sign the U.S. housing slump is broadening, as worries about credit quality and defaults spread beyond subprime lenders, which lend to people with weaker credit, to lenders that make higher-quality loans.

American Home, a large mortgage provider, said its lenders cut off access to credit, leaving it unable on Monday to fund $300 million of loans it agreed to make. It expected to be unable to fund $450 million to $500 million of loans on Tuesday.

So, does anyone have a solution to the real estate crisis that is looming? What can people do now? Anyone?

If all the mortgage companies go bust, what happens next?

I saw this coming. Really, I did.

I saw it when I went to the corner store for a gallon of milk. Today I am paying $1.00 more per gallon than I paid just 8 months ago.

Starbucks Corp will raise U.S. prices on coffee, lattes and other drinks by an average of 9 cents a cup next week to help offset soaring costs for milk and other commodities, a spokesman said on Monday.

The widely anticipated move marks Starbucks’ second price increase in less than a year and comes a month after the coffee shop chain’s chief financial officer warned it would be “very challenging” for Starbucks to meet the high end of its 2007 earnings forecast, in part because of rising dairy prices.

U.S. milk prices have soared recently amid strong global demand for dairy products and higher production costs.

Our local stores here have been telling us that the increase in dairy prices were caused by the drought in the area. Yeah, uh huh. I saw this coming.

And the lesson about over extending credit to people, no matter their financial viability continues…

JPMorgan Chase & Co. (NYSE:JPM – news) said on Wednesday it tripled the amount set aside for loan losses as even borrowers with good credit defaulted on home equity loans, hurting the bank’s quarterly profit.

The negative trend provides a new worry for investors. Until now, most of the angst has been focused on subprime lending, or loans to people with weak credit.

…

JPMorgan Chief Financial Officer Mike Cavanagh said losses on home equity loans to prime borrowers, or those with good credit, will steepen, partly because U.S. housing prices have flattened or fallen in some areas.

A few years ago most companies in the banking and mortgage industry began extending credit to people with adjustable rate mortgages and high rate credit cards, and it didn’t take a degree in accounting to see the disaster that would befall the financial markets if the market took a turn.

And to think, the market turned.

Now there is a glut in the industry and some people will never be able to pay back what they owe, which will in turn, raise the rates for the rest of us who were lucky enough to get our traditional mortgages and avoid the whole fiasco.

While Ford may be dumping one of their car businesses, it looks like they may be picking up another one.

Ford Motor Company (NYSE:F – news) plans to invest 675 million euros ($931 million) in Romanian carmaker Automobile Craiova (AUCSxm.BRQ) if it wins a tender to acquire a majority stake in the company, it said on Monday.

Earlier this month, Ford submitted the sole bid in a tendering for a 72.4 percent stake of the plant in a sale which the centrist government hopes to wrap up by September 1.

“If the Ford bid is successful, the company would commit to investing 675 million euros in the site to upgrade and modernize the plant in line with global Ford Motor Company standards,” Ford said in a statement.

I don’t know, maybe it’s me, but I think I’ve seen many more Volvos on the road than Craiovas. What about you? I didn’t even know they made cars in Romania.

You can buy anything online. Seriously. With more and more people turning to the internet to find that perfect item, companies left and right, with varying Merchant Solutions, are making it easy for those consumers to spend their money.

On Monday, Reuters reported that U.S. consumer borrowing was up by $12.9 billion, in May alone! With consumer spending rising at a 6.4 annual rate, the credit card processing industry is showing no signs of slowing down.

Just about anyone can start an online business these days because many companies offer different merchant services packages to their customers. There is a perfect set-up for everyone, from the mom and pop’s to those who require high risk credit card processing.

With outstanding credit in America totalling $2.441 trillion, $894.8 billion of which is credit card debt, the banks are definitely in control so businesses would be wise to shop around and learn as much as they can before settling on any one particular merchant service provider.

After 19 months of negotiating, it’s official.

A U.S. bankruptcy court on Wednesday gave Delta Air Lines Inc. the go-ahead to exit bankruptcy at the end of this month.

“We’re free at last,” said Delta Chief Executive Gerald Grinstein. “I feel elated.”

Delta, the third largest U.S. airline, emerges as a leaner carrier after cutting capacity and about $1 billion in labor costs.

While the U.S. airline industry turned a profit last year for the first time since before the September 11, 2001 attacks, Delta will emerge from reorganization amid signs of softening demand.

It’s amazing how well your company can perform when you elminate your debt through bankruptcy.

But Delta said earlier this week it believes its expansion into lucrative international markets and lower costs will help it weather a downturn. It has forecast a pretax profit, before special items, of $816 million this year, after a loss of $452 million in 2006.

But if you really hang in there, you can even grow during the process…

Delta expects to have a market value of about $10 billion, which would make it the second-largest U.S. airline by market value after Southwest.

General Motors Corp. is recalling more than 30,000 Chevrolet Corvettes because of a defect that causes detachable roofs to fly off while driving.

The recall issued this past week affects certain 2005-2006 models with painted roofs. The adhesive between the roof panel and magnesium frame may separate, GM spokesman Alan Adler told The Detroit News.

The Corvette’s hard top weighs between five and 10 pounds. If there is a complete separation, the roof panel may detach from the vehicle and it could strike another vehicle.

Of course, those who need to worry about this the most, are those driving the Corvettes who have something on their “roofs” that could fly off too.

Have you ever hit a rug at 70 mph?

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