Business N Finance

After the bipartisan legislation finally approved the $900 billion rescue bailout, more and more investors from different industries are keeping their eyes wide not to miss anything that the government has promised them, more so with the poorer citizens whose properties are at the verge of foreclosures. On the other hand, the stock market news says that there is nothing positive about the outcome of the billion-dollar bailout at this time. Banks are still hesitant to loan out their money to both consumers and other commercial banks to get more money with lower interest rates. Truly, the credit crisis has taken a major toll, but the ripples of its actions still make the market unsteady.

The U.S. administration now gets a full control on all the home foreclosures and financial institutions that are being affected by the credit crisis. While the stock market news says that lenders did not seem enthusiastic about the government’s program, the possibility of refinancing mortgages at a loss may still be slim. The government’s role in the current economic turmoil that has spread through the market does not simply end on passing a bill that will financially aid troubled industries but also in raising programs that will bring lending and borrowing back to usual business again. Surely, these companies have developed lending phobias as their industry has dipped back into the red. But they should realize that the bill is intended not only for saving their assets but also, and more importantly, giving affordable loans for the common citizens to refinance their loans again.

Also, the government should assure borrowers that the bailout money does not go only to a few rich banks, but toward stabilize reeling credit markets in the country. The recent stock market news revealed the government’s plan to sort borrowing processes that would provide for some more lending rules. Also, they have set their gaze on the lending rules of these banks, which would actually account for big headwinds to the downside that the companies may have acquired through the years. The Federal Housing Administration has also extended assistance toward the owners of homes by assuring them of the $300 billion foreclosure rescue for citizens who have had trouble financing their house loans.

Unfortunately, while the headlines reveal that these efforts are in effect, it won’t be until the next few weeks before the changes would be carried on, even with the major banks. Needless to say, investors are more favorable with adjusting mortgage modification programs which would give them lesser losses on the principal amount of loan of these borrowers.

bailout is just a quick salvage that needs another plan to back it up. The government should work on taming these banks to give the borrowers’ part of the bailout plan, and that is making loans affordable and easy to finance. Only then can we be assured that the credit crunch has finally left the scene.

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