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Archive for March, 2008

Loss Mitigation Salaries

While going public is often touted as a cure-all, surefire way to gain funds for a company, it's not without its drawbacks. If a company is not in a good position to go public, the decision may actually hurt the corporation more than it helps. Even as money flows in from the offering, the costs of setting up and maintaining a public corporation are high, and should be taken into consideration before such a drastic step is taken.

Even before a corporation actually goes public, the costs are high. It's not uncommon for a company to spend a year beforehand just to get the company in shape and gather necessary documents. Day-to-day activities become difficult as employees struggle to perform preparation work and their normal duties. Since investors want to see a company in excellent financial health, every aspect of the corporation must be examined in advance. If a company decides to go public and the offering is unsuccessful, it loses legal and underwriting expenses in addition to the lost capital.

For many business owners, the biggest costs of going public are personal losses. Privacy vanishes in a flurry of disclosure requirements, allowing investors, competition, and the general public to peer into previously confidential details of the company. Cost of sales, net income, major customers, and management salaries become available to anyone who cares to look. In some cases, these disclosures could give a substantial competitive advantage to competitors, especially those that haven't yet taken the step of going public.

Those disclosures can also mean huge expenses after a company decides to go public. Quarterly and annual SEC filings are required, and regular tax preparation becomes more complicated than before. Additional legal and accounting staff may be necessary to keep up.

When a company decides to go public, decision-making privileges are quick to go. Instead of making instinctual, unilateral decisions, shareholders must be considered and it may be necessary to consult with the board of directors. The kind of decision-making that made the company successful can give way to actions borne out the desire to minimize immediate risk and maximize shareholder revenue. Unhappy shareholders can drive down the company's value, damaging employee morale, personal wealth, and company reputation.

If insiders of a company fail to hold onto a majority of the corporation's shares, the loss of control can be even greater. While this can be mitigated by limiting the number of shares made available, it's a costly option to a company that is attempting to raise money. Some corporations going public prefer to offer voting-restricted shares. Such restrictions reduce raised capital in a more subtle way. Investors pay less for shares with fewer privileges, so the total funds raised are lower, even though a large number of shares is being offered.

Despite the drawbacks, many corporations find that going public is the most effective way to expand a business quickly without the use of traditional debt financing. For those that have carefully considered the positives and negatives, the transition can be smooth and prosperous for everyone involved.

About the Author:

Joel Arberman is the Managing Member of Public Financial Services, LLC. We help private companies through the process of becoming publicly traded via an initial public offering or direct public offering. Learn more at
http://www.PublicFinancial.com
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www.PublicFinancial.com

Article Source: ArticlesBase.com - Going Public: The Disadvantages

Let BANK pay you on SHORT SALE of your home--without them even knowing!

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Securitization Subprime Mortgages

Question: When and how did the Clinton administration allow for the securitization of subprime mortgages?

Please cite sources (specific legislation, executive order, etc. - not just "CRA changes in 1995")
I can't seem to find these "CRA changes of 1995" in any law or order. Trying to figure out if they are fact or folklore
....changes specific to subprime securitization that is...

Answer: when he signed the CRA changes that is when this all started to fall into place and is biting us in teh B--T today. How much more do you need to know except wall street and the investors pushed for more and more and they got it and now wish they had not

S1. What is Securitization?

Loan Modification Bankruptcy

Question: home loan modification question is this right.?

Please no junk answers from people advertising there services. thank you.
I have a friend Barry that has a home that he owes 190k worth 140k. He had a payment of 1950.00 at 10.5 percent. Barry has all these toys ranging from a boat, corvette, jet skis ect. Barry also makes 70k a year at his job, 30k results from bonus and commissions. Barry got a loan modification that reduced his balance to 135k, 4% apr his payment is now 845 a month. He told me he had to right up a expense report showing he is broke, be he showed only his wage of 40k a year. leaving out the bonus he received. With the savings in money he is going to bali next month with his g/f. Barry also filed bankruptcy 7 years ago.
Is this right are they not paying attention to peoples assets.

I am tring to get a modification, lost my job 4 months ago. home is worth less. They are not even budging.

Answer: depends on your lender. some are actually working with people making "new and reasonable" loans, others are not, but just act like they are.

i tried to do that with wells fargo, and they didnt budge at all. i owed 300k on a condo worth 100k; and they didnt want to reduce the principal at all; so i said see ya! lol Funny thing is now its gonna be an REO, they are gonna have to fix it up, pay a broker and sell it. thier bottom line will be about 85k after all is said and done! I would have gladly stayed put for a new loan amount of 140k or less with decent rate. These banks are idiots. I was gonna buy some wells fargo stock...but now seeing how dumb they are, idk anymore. lol

your friend is the exception to the rule. most loan mods only change your interest rate to lower your payment. lenders REALLY HATE to reduce the principal, so it rarely happens.

Loan Modification Secrets & How to Avoid Foreclosure