Friday, April 10, 2009
Tuesday, April 7, 2009
Wednesday, February 6, 2008
The Social Toll of the US Mortgage Crisis
What can and should a church do about it?
Take a moment to consider these recent stats effecting people in your community (and just possibly in your congregation). Then, I'd like you to consider what your church could do and how that ministry would bring you into the middle of the lives of hundreds, maybe even thousands of families in your community.
One telling stat is the new annual rate of foreclosures which affects 1 in 62 families and may continue or grow as some predict. If it just continues it will mean one out of every six families will be affected over the next ten years. To make this real, this is 1 of 6 families in your community or congregation!
But this does not include those who avoided losing their home through bankruptcy. And, beyond those who end up in foreclosure or bankruptcy, there are those families who are simply handcuffed by debt and with so little discretionary income they can't move an inch, much less even begin to pursue their dreams.
Debt: A roadblock to personal mission.
We spend a lot of time in our churches talking about obeying God in His call on our lives. Yet, what happens when He calls a person who is strapped to both clock and paycheck to keep things afloat? In real-world terms, who is their master? And how are ministries and missions affected? What would happen if suddenly, your whole congregation was financially free to answer God when He calls?
And what is our responsibility to those in our community who are hurting financially, to the shrinking middle class and to the widening new poor class? What mercy do we have to offer? What wisdom do we have to share to average Americans in pursuit of simple dreams... dreams such as home ownership, education, financial security, and the hope of leaving an inheritance to their own children?
Immediate Impact. Financial freedom for a family and a church will take a holistic approach, but for a family to feel immediate relief, the kind that gives hope, they have to have a way to address their debt in a big way. In the last year, strategies known to the banking industry for decades are now available to homeowners. One new approach can eliminate all consumer debt on day one, take a 30-year mortgage down to 8-11 years, and improve both cash flow and net worth dramatically in a very short time. I urge you to test the program yourself, on your home or the church mortgage (you can get an analysis here). You will be amazed as I was.
For ministry purposes, the key point is that there is no other single way to realize such a dramatic reversal of a family's financial health, in both the level of impact and the shortness of time.
Consider this...
- 75% of Americans live paycheck to paycheck.
- 95% of married couples fight about finances.
- Mothers who wish to be home with their children have to work.
- #1 cause of divorce in America is financially related.
- Average 28 year old has over $66,000 in debt.
- Last year the average American spent $1.22 for every $1.00 earned.
- 62% of Americans will retire with less than $10,000 income per year.
The real story of the social toll the mortgage crisis is having on average Americans has not yet been fully told. The evidence is staggering, but consider just these facts:
• Foreclosures: Not since the Great Depression have so many Americans lost their homes in one year -- and we’re not even in a recession, at least not yet. But we’re still on course to see 2 million foreclosures in 2007, afflicting one in 62 households, four times worse than the historic average!
• Lack of discretionary income: Also not since the Great Depression have Americans been able to save so little. Even with unemployment at historically low levels, Americans spent more than they earned in both 2005 and 2006 -- and charged the difference.
• Household debt, not including mortgages, now eats up nearly 15 percent of disposable income, three times as much just two decades ago -- more than food and gasoline combined. One in seven families is dealing with a debt collector. Children today are more likely to live through their parents’ bankruptcy than their parents’ divorce. The average household credit card debt for families with at least one credit card now exceeds $9,000.
• Lack of affordable housing: Median home prices in the US have nearly doubled over the past ten years, from $109,000 in 1995 to $206,000 in 2005, outpacing the growth of the consumer price index by over 33 percent during this period. As median-priced homes have moved out of reach of median-income earners, homebuyers have sought to use riskier mortgage instruments to bridge the gap.
• Declining equity: Moreover, the past quarter-century has seen consistent decreases in homeowners’ equity as a percentage of the real estate in their name. In 1979 families owned an average of 67.3 percent of their homes; this figure had dropped to 56.7 percent by 2004. The change occurred despite the recent rise in home prices, which might have allowed homeowners to translate the greater value of their properties into greater equity.
• Greater hit on middle to lower income families: The overall increase of mortgage debt, however, has not been spread evenly within the American population. A 2004 report by the Century Foundation found that low-income homebuyers had experienced an increase in their mortgage burden far out of proportion to their numbers. The report found a 191 percent increase in mortgage debt in the lowest income group, in contrast to 95 percent in the median income percentile and 39 percent in the highest. The report also notes that “a family with two earners today actually has less discretionary income, after fixed costs like medical insurance and mortgage payments are accounted for, than did a family with one breadwinner in the 1970s.”More than a quarter of low-income households now spend forty percent or more of their earnings repaying debt.
• An ominous forecast: The early indicators of long-term changes have made themselves felt in the foreclosure statistics over the last 20 years. This period also witnessed a four-fold increase in personal bankruptcies. Foreclosures more than doubled in just the past year, thanks in large part to the subprime lending crisis. And, according to Nick Jacobs of the nonprofit National Foundation for Credit Counseling, with monthly payments set to increase on two million mortgages over the next 18 months, things may get worse before they get better.
Predatory lending practices, speculation and widespread fraud cannot account alone for the scale of the foreclosure crisis. Additional causes lie in long-term trends; the stagnation of wages, the lack of affordable housing and the growing indebtedness of American households. But while we look for solutions many people are suffering and the ranks continue to grow.
As the economy worsens we need to offer hope founded in a holistic vision that includes Biblical principles of financial freedom and practical strategies to walk them out, to free people from the emotional and financial burdens that keep them bound. Why remain where we are, if we have the knowledge and the means to empower ourselves, our families, our churches, and our communities to pursue God's dreams for their life without hindrance?
Sources: This program is detailed on the Equitydreams home page, and to get the free analysis you can go directly here.
Next... Part 2: Integrating financial freedom into the transformational vision.
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Two Profiled Results of the MMA program on two different families.
Check out these two summaries of what this program did for two completely different households. One is a young, two-income family with two kids, the other is a widow with a little discretionary income. It's hard to believe. Here are the profiles>................................................................................
Your own analysis Quick and easy, get your complete analysis.
This is a quick online analysis request in which you can plug in your own numbers an see exactly what the program will do for you. It's amazing to see how many years come off your mortgage and how much interest is saved.
................................................................................
Equitydreams.com All the information on the Money Merge Account program.
................................................................................
The Social Toll of the US Mortgage Crisis
The real story of the social toll the mortgage crisis is having on average Americans has not yet been fully told. Consider these recent stats effecting people in your community.
................................................................................
A Church Perspective
Capturing Wasted Funds and Stagnant Money for Outreach. Exploring the impact this program would have on a congregation and their community.
Tuesday, November 13, 2007
Emerging Finance: Capturing Wasted Funds and Stagnant Money for Outreach.
by C Michael Johnson
What if you could capture most dollars spent servicing interest debt and other stagnant or wasted funds, and free it up for community outreach and ministry?
What would that amount be for your church?
Recently, a pastor called me to ask if we had any "low cost" strategies they could do to reach their community. He went on to explain their problem. When they first took out the mortgage on their church building they were a larger congregation. But over the last few years they lost membership, now it is all they can do to service the debt. Now they are in a catch-22... they need more members (to among other things, service the mortgage), but have no funds for outreach.
I've heard stories like this before, and it always hits a nerve with me. When I think about the thousands of dollars typically wasted on servicing mortgage debt (most of which goes to interest), and how that same money could yield so much more in eternal returns if it was not diverted from outreach or community ministry. Every month we are putting money in a bag with holes!
Before now, there were not many options. But several months ago we began researching a financial leveraging strategy that has been used effectively for the last 10 years in Australia (now 35% of mortgages) and in the UK (now 25% of mortgages there). It came to the US over a year ago, was greatly improved on, and now seems to be sweeping the country. Some predict it will change the way we do mortgages here as it has elsewhere.
I would encourage you to do a quick, online analysis on your church mortgage, and your personal residence at this site. See what it will do for you. The actual case reports we've seen show 30-year mortgages reduced to half or 1/3 of the remaining years, some as low as five or six years! All of this comes without refinancing or the need for additional cash flow. In other words, is does not tax your general fund one dime!
Please take a minute to punch in your numbers online. The team at Equity Dreams will complete a 4-page free analysis and return it to you by email. My own analysis was incredible, and it only took a few minutes to do.
And let me know how it goes. I fully expect you to be amazed at the results, and your story could help pave the way for many other churches to get out of debt and free thousands of dollars for Kingdom use.
Wouldn't that be a great way to start the year?
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This is the beginning of a series of Mindstorms on leveraging greater financial intelligence and integrating smart economic strategies into the community transformation paradigm. I welcome your comments.
EquityDreams is a powerful community transformation tool.
Here's the full contact information:
Jeff Patteson, a community ministry strategist
Email: jeff@equitydreams.com
Phone: 804-557-3119 Cell: 336-468-0760
Website: equitydreams.com
Online Analysis Page
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Two Profiled Results of the MMA program on two different families.Check out these two summaries of what this program did for two completely different households. One is a young, two-income family with two kids, the other is a widow with a little discretionary income. It's hard to believe. Here are the profiles>
................................................................................
Your own analysis Quick and easy, get your complete analysis.
This is a quick online analysis request in which you can plug in your own numbers an see exactly what the program will do for you. It's amazing to see how many years come off your mortgage and how much interest is saved.
................................................................................
Equitydreams.com All the information on the Money Merge Account program.
................................................................................
The Social Toll of the US Mortgage Crisis
The real story of the social toll the mortgage crisis is having on average Americans has not yet been fully told. Consider these recent stats effecting people in your community.
................................................................................
A Church Perspective
Capturing Wasted Funds and Stagnant Money for Outreach. Exploring the impact this program would have on a congregation and their community.
Monday, October 1, 2007
2 Profiles: Summaries of actual results
Two overviews of actual results showing what the Money Merge Account program did for two different households.
Click on each image below to enlarge or download a single PDF here.
