{"id":1652,"date":"2008-12-02t00:33:44","date_gmt":"2008-12-02t05:33:44","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=1652"},"modified":"2015-10-23t03:36:27","modified_gmt":"2015-10-23t07:36:27","slug":"new-wave-of-foreclosures-threatens-smallest-businesses","status":"publish","type":"post","link":"\/\/www.g005e.com\/2008\/12\/02\/new-wave-of-foreclosures-threatens-smallest-businesses\/","title":{"rendered":"new wave of foreclosures threatens smallest businesses"},"content":{"rendered":"

microbusiness vulnerable in credit crisis.<\/strong><\/p>\n

the national association for the self-employed estimates that 3.8 million microbusiness owners hold an estimated 93% of so-called “toxic mortgages” that put them in immediate danger of foreclosure and homeless in the near future.<\/p>\n

in fact, mortgage brokers evidently deliberately targeted micro-business borrowers who (by their nature) lacked access to traditional small business financing.\u00c2\u00a0<\/a><\/p>\n

“small business is the job creation engine of our economy,” according to cpa sam bornstein, who conducted the study for the national association of the self-employed. “proactive efforts must be taken to provide small business owners with immediate and specific financial guidance, combined with other measures, to avoid default on mortgages and other debts in this critical and challenging financial crisis.<\/p>\n

the data, released by the national association for the self-employed (nase) in coordination with prof. bornstein at kean university in union, n.j., and jung i. song, cpa of bornstein & song, cpas and consultants in oakhurst, n.j., shows that these “toxic” loans did not go to subprime borrowers.<\/p>\n

rather, these “toxic” mortgages were targeted to small business owners who were prime and near-prime borrowers and may now find themselves facing sky-high monthly house payments. the results of the study were extrapolated based upon an estimated 16.2 million self-employed small business owners in 2007, according to the small business administration’s office of advocacy.<\/p>\n

with the majority of the nation’s small businesses being run from a home office, this alarming evidence has significant implications for businesses owners facing foreclosure who may be forced to shut down for good. the “toxic” mortgages that were marketed to prime or near-prime borrowers include alt-a, alt-a arms, option arms, and interest-only.<\/p>\n

based on the nase survey, approximately 3,709,800 micro-businesses hold “toxic” mortgages. the magnitude of this alt-a and “toxic” mortgage crisis exceeds the subprime mortgage crisis which had $855 billion of subprime loans outstanding.<\/p>\n

“these small business owners will be at-risk for “payment shock” and default as their monthly mortgage payments skyrocket during the “resets” that are scheduled to begin in 4th quarter 2008 and continue through 2012,” said bornstein. “the resulting defaults will be the cause of the upcoming second “tsunami” wave of foreclosures that will dwarf the subprime crisis and will take many homeowners and small business owners.”<\/p>\n

“the current housing crisis is hurting entrepreneurs because they are unable to obtain important financing, such as home equity loans in order to start, operate and grow their businesses,” said kristie darien, executive director of the nase legislative office. “addressing the housing crisis and credit crunch for the small business community must be the first steps taken to minimize our nation’s economic decline.”<\/p>\n

survey highlights:<\/strong><\/p>\n

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