What is a mortgage ?

Is the funding to invest in the areas of acquisition, construction or renovation or improvement of housing and administrative units, service installations and buildings of stores devoted to commercial activity and by ensuring that the concession on the property or mortgage subject to a formal or other guarantees which are acceptable to the taxpayer in accordance with the rules and procedures prescribed by the Regulations for the Law of Real Estate Finance . 2) What are the advantages of mortgage? The longest possible repayment...

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The repercussions of the subprime crisis in the United States

The repercussions of the subprime crisis in the United States

    
* Experience the insurance company American: American International Group (AIG), which is one of the largest insurance companies in the world, serious risks since the financial crisis continued to ravage the U.S. economy following the announcement of the bankruptcy of Lehman Brothers investment and the imposition of the sale of Merrill Lynch rival, and that in the biggest shock of the financial sector since the Great Depression in 1929. He sought the help of the Federal Reserve (the U.S. central bank) Bank, Morgan Stanley to review options for AIG Insurance, which lost about 90% of its value since the beginning of the year. The Council discussed the possibility of arranging loans between two sevenths and 75 billion dollars to support the company (AIG), in addition to the financial options other, and turned to Goldman Sachs and Pocket Morgan as financial advisor for the company to discuss a range of options, pointing out that the credit facility, which will be a loan pool of a number of Banks is just one of the options that were discussed. The Federal Reserve also revealed his plan to increase its loans to banks and financial institutions, and expanding the scope of institutions and companies that can benefit from these facilities. The head of the Federal Bank Ben Bernanke that he discussed with the participants in the market weaknesses and fragility of the market after the collapse of a major financial institution, and appropriate responses by the public and private sectors to do so. These positions came under growing fears for the global financial meltdown as a result of the U.S. economic crisis. Said Mark Badu, strategist at Cantor Fitzgerald & Co in San Francisco that "concern for Bank of America is in debt acquired," he said, adding that there is a fear that the bank may be biting off a larger piece of his ability. With the fall of more new victims, the largest of the growing crisis, the Fed said for the first time that he would accept the shares for cash loans. A dozen of the world's largest banks have agreed to establish an emergency fund size of seventy billion dollars, that any of them be able to get up one third of this amount. In financial markets the Bank of America shares fell the most yesterday, despite that the bank would exceed the rival Citigroup, becoming the largest bank in the country in terms of assets through the acquisition decision of Merrill Lynch. And close on the Dow Jones industrial average was down by 4.4%, while the benchmark Standard & Poor's by 4.7%. Shares of Lehman rose 95% to 18 cents. Long the crisis of the U.S. mortgage various economic sectors in the United States and Europe and led to financial losses can not be accounted for and banks suffered huge losses and declared bankruptcy and the collapse of some of them. She said that the credit crisis due to the stoppage of a large number of borrowers to pay premiums of financial due on them, which led to incur the largest institutions of the mortgage in America and are Fannie Mae and Freddie Mac caused extensive damage made the U.S. Treasury have to rescue the first of its kind, which had a role in saving global economy as well. She added that the two institutions have treated the last two the amount of six trillion dollars, an amount equivalent to six times the size of the economies of the Arab countries combined. She stressed that the current financial crisis has not seen the world like a century ago and will have implications for the collapse of several banks and banks or declare bankruptcy. Turning to the non-finance expert knowledge of the investment portfolio to financial institutions, many do not know the extent of losses in financial institutions will be affected by a factor of confidence among investors, raising fears that investors refrain from investing and other repercussions. And felt that it can not be separated between the capital markets, whether equities or bonds, real estate, currency or the banks they are all linked together. And considered that it was difficult to predict what will happen in the coming days and will take the Fed (U.S. central bank) of steps to address the current financial crisis. The U.S. President George W. Bush administration sought to reduce the impact of the bankruptcy of Lehman Brothers and its associated developments on the financial markets. The most famous bank, "Lehman Brothers", the fourth largest bank in the United States, went bankrupt in the early hours Monday after the failure of efforts to save him, and the bank will declare bankruptcy to bankruptcy court for the Southern New York. He justified the bank's move to maintain the greatest possible extent of its value and protecting assets. And the incurring of Lehman Brothers billions of dollars in losses because of investments in the mortgage market. And control authorities resorted U.S. banks last July to close the Bank First National Bank of Nevada and twenty-five branches, and also shut down Bank First Heritage Bank branches all three. And sold the assets of banks owned by the company First National Bank Holding Company of Omaha Bank branches. The value of the assets of banks $ 3.6 billion by the end of June lower than it was six months ago where she was a $ 4.1 billion. The Bank and Chovia Corp's fourth-largest bank in the United States suffered losses quarterly record in the second quarter of this year's $ 8.86 billion dollars, authorities closed the Banking Supervision American Bank First National Bank of Nevada branches twenty-five, and also shut down Bank First Heritage Bank branches all three. And sold the assets of banks owned by the company First National Bank Holding Company of Omaha Bank branches, which will re-reopened Monday after closing for two authorities on Friday. The value of the assets of banks $ 3.6 billion by the end of June are lower than what it was before six months had a $ 4.1 billion. These two new Alivlassan lift the number of banks that have declared bankruptcy in the United States since the beginning of the year to seven. In atheist th of July last Bank announced that the de Mac in California went bankrupt in the third largest event of its kind in the recent history of the United States, note that the assets of the bank amounted to 32 billion dollars. And before it went bankrupt bank Bear Stearns in March to buy JP Morgan in a deal overseen by the U.S. central bank. The relay bank bankruptcies western United States with the exacerbation of the crisis the real estate market and the failure of several institutions.

The effects of the subprime mortgage crisis in Europe

Bank decided to Commerzbank's second-largest German banks at the beginning of the month of September to dispense with nine thousand jobs in the framework of a deal to buy rival Dresdner Bank. The deal is valued at 14.5 billion dollars, so in what is billed as the biggest restructuring in the German banking sector since more than seven years. Royal Bank of Scotland (RBS) under the Declaration of losses of British banks for the month of July 2008 losses amounted to 691 million pounds ($ 1.35 billion) in the first half of 2009. European stock markets fell after British Prime Minister Gordon Brown's decision to nationalize the British authorities bank Bradford & Bingley, and Belgium followed the same step with Fortis Bank. Banks, who greatly affected by the effects of the mortgage crisis in the United States, created a state of tension and suspense in the European financial markets, as called for France to hold an international conference to discuss the current crisis. [Edit] Report of the Bank UBS Swiss A report issued by UBS Swiss said in a statement the reasons for the bankruptcy of the bank: that poor assessing the degree of risk in complex transactions associated with the mortgage was one of the most important causes of such tragic loss, the bank also justified based on the desire of the mortgage sector in achieving the greatest possible profit sector real estate investments, in anticipation of access to the rank of a distinct worldwide. The report also acknowledged that, despite the knowledge of the working group specialized in the management of real estate investment risks surrounding the U.S. market, but they did not call for assessing the impact of such risks on transactions, and did not put a limit to the dealings in the U.S. mortgage sector. I find that eventually the financial crisis if you do not change course in capitalism by raising interest rates it is threatened by a massive loss does not include only the real estate sector, but all areas of actual major countries to benefit from the experiences of non-Ptok benefits. And Oofaqa to the report, the root of the problem back to the year 2005, which advised the group of experts from outside the bank dealing with mortgage securities, U.S. Vansaq UBS behind that recommendation, and pushed strongly in the purchase and establishment Bags investment rose from its position in the global markets After selling them to investors. Which is exacerbated by the size of the losses that the bank has to invest heavily in some hedge funds closed up a great loss, only to discover experts UBS that their dealings were not enjoy full transparency, but does not have experts in any study on the ratio of the potential risks. The synchronization of dissemination of these results with the announcement of the Commercial Bank of Germany for a study on more banks hit by the mortgage crisis the U.S., has been found that Swiss banks lost an average of 40% of financial assets, ranking it second after some U.S. financial institutions, Kraushaar, institutions German financial decline of 15% of its assets, and Britain was the least loss of 5%.

Mortgage and possible solutions

Increased in the recent period the demands of professionals to expedite the issuance of the mortgage law in Saudi Arabia, where they expect it will restore the natural balance of the real estate market after the withdrawal of speculators in the event of a law, they say, will demand real investment and not a placebo, which will prompt developers to return to the market to meet the needs of the population who are looking for ordinary homes or luxury, it is worth mentioning that the Kingdom is working on finalizing the draft regulations on the mortgage to be issued this year.There are many opinions about the importance of the mortgage and disadvantages in the event of application, but the specialists say that it has become a pressing need in light of the circumstances affecting the real estate sector because of the inability of people to buy apartments, residential, and projections indicate that the mortgage system in Saudi Arabia will introduce a shift in the direction of demand for real estate to rise by about 50 percent, and finds workers in the real estate sector that the mortgage system will have the benefits of great influence, both on the real estate market or the banks themselves, which will have to update their programs and services and develop them into even better able to meet the needs of the real estate sector during the next phase. Projections indicate that the mortgage system will adopt during the remainder of the year.It is worth mentioning that the mortgage system has raised over the past two years a lot of controversy in the domestic arena is Saudi Arabia, and managed during this period to restore vitality to the real estate sector once again, especially with stock losses successive, which had lured profit capital investors in the real estate sector, and in this connection report said Jones Lang LaSalle for real estate studies recently published, that the mortgage in Saudi Arabia will work to add positive points in the real estate market in the Kingdom, while also faces obstacles standing in front of its application, and that the positive points is that the mortgage would be a legitimate framework to the issue of borrowing, where the foreclosure laws apply Islamic law in financial transactions, helping to increase loan applicants and the increasing demand for housing.The report confirms that the mortgage will increase the numbers who wish to own housing, which means lack of demand for residential rental, and the achievement of the pressure on prices of residential units which will lead to lower selling prices and competition among developers, and spur local developers to increase housing construction, which contributes to the advance the development by the construction sector and related aspects.Experts believe that the mortgage if implemented, would not affect prices too much, because a lot of people have financial obligations to the banks because the loans, some have even purchased the land through the bank or even buy a house, as banks, companies established and began offering loans, for this would be a positive impact in the interest of real estate investors and will increase their investments and Tktalathm real estate, which contributes to move the volume of large transactions, and others argue that the mortgage will increase the capacity of those willing to get the pieces of residential property, therefore, without doubt, the mortgage will raise prices the imbalance of supply and demand, it will raise the property on the one hand, and will be a crisis on the other hand, in the sense that it has the property Serhnha to obtain the liquidity that will allow the creation of new investments of benefit to the merchant on the one hand and increasing opportunities for investment in a short time, thus meeting the increasing demands in the market of the house, and it is known we are the highest percentage increase in population growth in the world and the largest segment of young people, which requires a larger number of residential units, either rent or own, adding: It is possible for the average citizen that the mortgage is owned by and take advantage of this money to invest in successful without fear for his home and risk it would become a disaster, as happened in America, as happened in the stock when borrowed a lot of people have become more frequent liquidity in the market, which led to the landing and the loss of many people in their capital, and continue to repay their debts. It is a double edged sword, Fboidina benefit from it without recklessness and risk-taking and check it carefully in how to invest these funds.And spends the Saudis, according to industry reports up to one-third times the rental of housing, with an estimated average annual rent after wave of high prices by about 35 thousand riyals, while the average value of the installment to the owners of mortgages intended for home ownership 3 thousand riyals, a total of 36 thousand, and some studies suggest that 47 percent of Saudis have obtained a mortgage through personal loans, and 24 per cent through private savings, ie cash, and 16 percent from friends or family, and 7 percent of the providers of financial services 0.6 percent of the developer.The upsurge in demand for financial products at the time recorded by Saudi Arabia in second place globally in the rate of population growth after Yemen. Experts say Islamic real estate finance industry as a sleeping giant about to wake up with the trend for the implementation of standard transactions worth billions of dollars this year.Observers expect to announce the Kingdom before the end of this year, a new mortgage system, after completion of the details of all regulations. The importance of making the mortgage system to enable the business sector to contribute in facilitating the citizens have their own homes, as well as support and financing of national industries, especially in light of the reluctance of local and foreign banks from lending to those industries.Experts have predicted that the adoption of open system mortgage wide local market in light of funding channels clear and guaranteed. Real estate Saudis are betting that the application of mortgage system in Saudi Arabia would rein in property prices and residential units in the past is rising, make the dream of home ownership is unattainable for the majority of citizens

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