...A New House - Risks and Benefits XCEO-212 May 13, 2011 A New House - Risks and Benefits A few of the government bodies that influence national fiscal policies that potentially affect the housing market are: Federal Reserve System (FED), Housing and Urban Development (HUD), and the Federal Emergency Management Agency (FEMA). “The Federal Reserve System of the U.S. is the central banking system of the U.S., comprised of the Federal Reserve Board, the 12 Federal Reserve Banks, the Federal Open Market Committee, and the national and state member bank. Its Primary purpose is to regulate the flow of money and credit in the country” (InvesgtorWords.com, 2011). The federal secure interest affects variable interest rates of mortgages by using the interest only loans, which you just pay the interest and no principal, so when the housing price falls, refinancing is impossible. The reason refinancing is impossible, is because there is no equity or profit made and the house value diminishes and there is no way to refinance when the house is worth less than the mortgage amount. When the value of your home goes up, then you can refinance. The HUD Act affects mortgages for “single-family and multifamily dwellings and extending loans for home improvements and for the purchase of mobile homes; channeling funds from investors into the mortgage industry through the Government National Mortgage Association; and making loans for the construction of rehabilitation of housing projects for...
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...A New House Risks and Benefits * In general terms, national fiscal policy refers to the way in which a government’s spending and taxation policies are able to influence the economy. Governments tend to use fiscal policy to control aggregate demand, price stability, economic growth and employment. Fiscal policy is a contrast to monetary policy, the alternative macroeconomic policy whereby attempts are made to stabilize the economy by controlling the money supply and interest rates The Federal Reserve System is the central banking system of the United States. It was created in 1913 with the enactment of the Federal Reserve Act, and was largely a response to a series of financial panics, particularly a severe panic in 1907. HUD, That is the Housing and Urban Development, FHA, FEMA, DHS, and a bunch of others all affect the housing market. Deductability of mortgage interest and real estate taxes. Anything that the the government does that affects tax receipts/expenditures (aka fiscal policy) changes demand for housing. When the demand for housing changes mortgage rates, prices, etc. all change accordingly. A government could provide tax concessions to encourage builders to develop on greenfield sites rather then brownfield sites, thus increasing the overall supply of housing. This in turn should theoretically have the result of driving housing prices down. From the perspective of homeowners, certain government taxation will have a direct impact on housing prices. Placing a...
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...interest rates for mortgages in recent history. With so many houses in foreclosures and even more neighborhoods and housing markets suffering from the current economic crisis the likelihood of people buying homes has decreased over the past few years. With federal agencies such as the Housing and Urban Development (HUD), The Federal Reserve System, and FEMA, helping to determine housing costs, developmental costs, annual living expenses, and other variables play specific parts in determining market value for homes as well as interest rates on mortgages. Prime lending rates are a huge factor. It will determine whether or not a lender may borrow money from the Federal Reserve to finance the mortgages that people are applying for. These loans also include construction loans for new homes, which will affect new home sales, prices, and the market. Higher interest rates will raise wholesale home prices because of the cost of borrowing it however when interest rates are too high people can no longer borrow the money making the prices begin their decline. The government bodies that influence the national fiscal policies that potentially affect the housing market are the Federal Reserve. This body decides the rise and fall of interest rates. The risks in buying a home right now are that if the housing markets continue to decline your homes value may end up being less than what you still owe with your mortgage company. The benefits are that if you purchase a home it is your property, it is...
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...policies are created through the regulation of the amount of currency that is in circulation through the sale or purchase of T-Bills. If the Federal Reserve Banks purchase T-Bills more currency is then released into circulation which will lower interest rates. If the Federal Reserve Banks sell T-Bills currency is taken out of circulation which in turn raises interest rates. Private banks use these base interest rates to then determine the amount of interest to charge its customers when they wish to borrow money in the form of personal loans, construction loans, building loans, and mortgages. If interest rates are high, mortgage rates will also be higher. The higher the rates the less likely consumers will apply for a mortgage to purchase a new home. The Federal Reserve also purchases mortgage-backed securities to provide support to the mortgage and housing markets and to improve conditions in financial markets. These purchases allow entities such as Freddie Mac and Fannie Mae to provide more mortgages to consumers (Burek, 2010). The U.S. Department of Treasury controls the value of the dollar which impacts the economy through inflation. The Treasury can affect the housing market through the sale of Treasury Bonds, T-Bills and Notes. The interest paid on these affect the fixed-interest mortgage rates. The lower the yield, the interest paid on the notes, the lower the fixed-interest mortgage rates (Amadeo 2010). The lower the rates the more willing consumers will be to make larger...
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...A new House - Risk and Benefits Leatrice McKibben XECO 212 September 25, 2011 John McGee A new House - Risk and Benefits There are many government bodies that control the housing market; HUD, Fannie May, House of Representatives, and Senate. The Federal Reserve Bank, even though not a government office but a group of private corporations, independent from the government but very much in control of the government, has the power to control what the interest rates will be and how the economy is ran. The major factor that determines what the Federal Reserve will do is the Prime lending rate. This rate determines if banks, mortgage companies, and other lenders can borrow money from the FED. For example; construction companies can barrow from banks to build more houses. The higher the interest rate, the higher home prices will become because of the cost of borrowing. When prices get to high, people cannot borrow money to buy them or to build them. The risk of buying a home does not know what the FED will do next. Will it raise or lower the interest rates and how long will it take to affect ones mortgage. The benefit of buying a home is that one can shop for the lowest interest rate and get government funding to help with the down payment and other housing lending cost. My recommendation for buying a home would be that one looks at the last few years of the housing market in the location of where one plans to buy. One could ask these questions; what is the current market value...
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...XECO212 2-11-14 New Home Risk and Benefits There are many risks associated with purchasing a new home. Understanding what the risks and benefits that are associated with purchasing a new home will help a potential buyer make the right decision. I recently purchased my first home last year, and found myself weighing in on all the benefits and risks associated with my first home purchase. A couple of more recent fiscal policies that the government implemented recently were the first time home buyer credit and a new low interest rate of 3.1% for qualifying buyers towards a first home purchase. These two policies that were implemented by the government were meant to change the demand for homes in the economy and target new home buyers to purchase their first new home. This in return would jump start a boost in the economy by theory. These two policies where what made my decide to purchase a new home because they were and are great incentives. The first time home buyer tax break/ credit has since expired, however all time low mortgage rates are enticing buyers to purchase new homes still. The government also backing FHA loans allows first time home buyers to be approved for their first home loan in a tough economy. If the economy takes off, more houses will be purchased, the values of homes will rise, and eventually interest rates will rise once the government feels that spending is at a high point in order to slow the economy from over growth. I feel that the risk of buying in a...
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...insuring bank loans for home buying. Considering purchasing a home, it is important to know if the interest rate is important to know if the interest rate is relatively low compared to others; as well as if getting a fixed rate rather than a variable rate which can fluctuate at any time. When making the final decision of purchasing a new home, there are many factors to take into consideration and how risk and benefits may have an impact on the final decision as well as the current state of the economy. Knowing what you are looking for and what to expect to find out about all the risks and benefits when finding the place. Certain cycles of the economy will benefit the buyer and during other times, it mainly benefits the seller. Making sure to consider the marginal benefits and cost tied to purchasing a new home will assist a person that is purchasing his, or her new home during a positive time in the market as well as the economy. Marginal benefits are the benefit changes over the quantity change and marginal costs, which are the cost change over quantity change. For example, buying a new house during a recession would not be too beneficial because the benefits are out-weighed by the marginal cost. During a...
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... April 7, 2013 Rent or Buy? The birth of a child means new responsibilities for the parents. One of the biggest responsibilities is providing a safe place for the child to live. This means the parents need to make a decision on whether to rent or buy a larger home for the growing family. If I were personally presented with this decision right now, I would make the choice to rent rather than buy. As I considered this decision I took into consideration many the economic principles that I have learned in this course and how they affect my ability to buy a house. The first principle I thought about was how much I could afford to pay for a house. This was the major factor affecting my decision. My income right now is very limited so at this time I do not have the means to save toward a down payment. Without a guarantee that my financial situation will increase, it is not wise for me to make a commitment like this at this time. I need to finish my education and find a more secure, better paying job first. I also considered other economic related factors when I made this decision. I thought about the type of neighborhood that I would want to live in, the additional financial responsibilities of owning a home, the total monthly and yearly cost of homeownership, the risks that come with owning rather than renting, my lifestyle and spending habits and my current savings account (O'Brien, 2005). ...
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...transition to the new benefit plan, Colbert is directing the development and installation of a benefit election system to support the tracking and reporting of employee (union and non-union) benefits (Apollo Group Inc., 2011). With the new benefit system coming online brings new security requirements and possible risks that must be addressed. This document will list some of those security requirements and risks of the Benefits Election System of the company. Paper Risks and Security Requirements Huffman Trucking is a national transportation company with 1,400 employees working in logistical hubs across the United States. The human resources department currently maintains several tracking mechanisms for its employee information. The company has an HRIS system that was developed in-house that maintains a database of personal information. One of the company’s managers also maintains an Excel spreadsheet for individual compensation decisions and surveys. With the recommendation to convert the Excel spreadsheet to a database system, it is a wise choice to integrate the paper data into the already made HRIS system database. In either case, there is a need to provide planning and security for the system. To address the one possibility of integrating the Excel spreadsheet into the benefit election system, there are a few risks associated with paper-based systems and security baselines that must be met. Maintaining paper presents risks such as environmental risks. This can include...
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...ABSTRACT While outsourcing internal audit function in the private sector has been extensively Investigated by various researchers (Carey and Chua, 1999; Petravick, 1997; and Sharma and Subramaniam, 200l; amongst others), there is scant empirical data from the public sector. This study attempts to fill the gap by providing some preliminary evidence in food and beverages industry. Using responses from 3 firms which includes Dangote flour mills, UAC and Northern Nigeria flour mills plc, the study found that more than 85% of the respondents had either fully outsourced or co-sourced their internal audit function. Further, non-department entities were found to more likely to fully outsource their internal audit function than the departments. Lack of technological know-how and service quality of external providers seem to outrank cost-related factors as reasons for outsourcing. The study also raises several issues in relation to a lack of segregation of duties in the process of selecting and monitoring outsourced arrangements. Implications for policy setting and avenues for future research avenues are discussed. INTODUCTION In today’s business environment, outsourcing processes to a third party has become relatively commonplace. The practice gives organizations an opportunity to gain efficiencies, improve performance, lower costs, and focus on core competencies. Many businesses, however, fail to complete necessary due diligence work before the outsourcing relationship begins and neglect...
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...A-TEAM IIS Network & Communications Infrastructure Plan March 30, 2015 NETW 490 – Senior Project Prof. Nabeel Baig The A-Team Members: Michael Watson Jose Gutierrez Jr. Cory Brown Dean Bennett March 30, 2015 NETW 490 – Senior Project Prof. Nabeel Baig The A-Team Members: Michael Watson Jose Gutierrez Jr. Cory Brown Dean Bennett | Table of Contents | | | Executive Summary 2 Project Overview 3 1.1 Project Overview 3 1.2 Project Description 3 1.3 Alternatives Considered 3 1.4 Recommended Solution 3 1.5 Risks 3 Project Description 4 2.1 Project Background and Opportunity 4 2.2 Business Needs 4 2.3 Project Objectives 4 2.4 Organizational Benefits 15 2.5 Project Scope 5 2.6 Out of Scope 5 Alternatives and Cost/Benefit Analysis 6 3.1 [Possible Solution 1] 7 3.2 [Possible Solution 2] 7 3.3 [Possible Solution 3] 7 3.4 Comparison 7 3.5 Recommended Alternative 7 Project Risk Assessment 8 REFERENCES 9 Executive Summary | | IIS Network & Communications Infrastructure Design Plan IIS prides itself as an industry leader with product lines such as the revolutionary “” Thinking Navigator, which is a first of its kind to integrate GIS and real-time satellite imagery data with proprietary software algorithms. IIS is currently comprised of two division; Consumer and Military Defense Divisions with Corporate headquarters in Dallas and branch offices in Fairfax, Shanghai and London. The Military Defense Division...
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...any additional functionality? If so, what functionality? Response: Yes, I would upgrade both the POS terminal and modernize the operating system. With Dos being outdated and no longer being supported by the IT industry Zara has an unnecessary business risk. Zara supports the IT requirements with an in-house team, they are supporting an archaic system which limits their ability to be proactive. Should the system go down and the in-house team determines that either the current system is not viable or is to expense to maintain Zara may be left limping along with the old system while the IT department focuses on the change over to a new system. This risk can be mitigated by bringing in a new operation system and via a staged implementation process upgrading the POS system. I would also look into upgrading the system to include live inventory and update the currently ordering process. I believe their “just in time” operation would benefit from the Corporate Office having the ability to actively move product to the stores. The managers currently download sales information from their PDA’s, place the information on a floppy disk then upload this information via a modem nightly. This process along with the managers ordering new stock utilizing a fax machine appears both cumbersome and time consuming. If all ordering were to be completed either by the mangers on-line or at the Head Office by the Commercials it would allow for a more efficient process and may lead to administrative...
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...1. Identify all the economic entities involved in the development of Anacomp’s CIS software system. Anacomp, a limited partnership: RTS Associates - BANKSERV 10000, CEFT, CDA and CIBS, thirteen major banks including the National Bank of North America in New York, the Shawmut National Bank in Boston, Provident National Bank in Philadelphia and the First national Bank in Kansas City as advisory banks. 2. i. Describe the contractual arrangements between the economic entities involved in the CIS development. Anacomp would develop the CIS system on behalf of the partnership. In return, the four banks collectively contributed $6 million and 24 software development people for 2 years to the project. The same considerations were present in each of the four subsequent partnerships. Each partnership assumed development risks; except for BANKSERV 10000. Any product developed becomes the property of the partnership. Upon completion of the development of the CIS system, Anacomp agreed to market CIS for 5 years on a commission basis. Anacomp also had the option to acquire all rights to the CIS system at the greater of its appraised fair market value or RTS’s investment plus a fixed profit but is under no obligation to exercise this option. RTS had the right to extend Anacomp’s 5-year marketing agreement an additional 5 year or to cancel it if Anacomp did not use its best efforts to market CIS. If the CIS development expenses exceed $6 million, the RTS was required to pay further development...
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...cheques & Automated Clearing House over our economy | 5-18 | New era in Bangladesh Banking | 5 | Old payment and settlement system | 7 | Clearing activities in old system | 7 | Difficulties in old system | 9 | New payment and settlement system | 10 | About MICR cheques, its processing ,benefits and strength | 11-14 | About automated clearing house | 14 | Overall contribution over our economy | 16 | Chapter3 - Criticism | 19 | Chapter4 - Conclusion | 20 | Chapter5 - References | 21 | 1. Introduction 2. About Bangladesh banking and the new era 3. Old payment and settlement system 4. Difficulties of old system 5. New payment system Executive Summary This Term Paper is about the “contribution of MICR cheques & Automated Clearing House over our economy”. It is great pleasure for us that banking industry of Bangladesh is growing and modernizing its activities to a great extent. So in my term paper I have tried to demonstrate our new payment and settlement system, which recently adopt new methods and systems. As we know Bangladesh bank launched new MICR cheques as the initiative...
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...Risk Paper 1 Pm595 Risk Paper: Buying a new house Project Risk Management Professor: James Reckon By Magued Farag May 24, 2014 TITLE: BUYING A NEW HOUSE TABLE OF CONTENTS INTRODUCTION RISKS IDENTIFICATION RISKS RANKING MATRIX RISKS MONITORING CONCLUSION REFERENCES * INTRODUCTION Whenever considering a major purchase in life one must carefully consider the risks associated with making these purchase decisions. These decisions should be treated as projects in such a way that proper planning, analysis, risk assessment and contingency should all be aspects of the purchase process whether formal or informal. In this paper, I will discuss about a project that many people are familiar to: buying a new house. Few years ago, I moved to a new area and was trying to decide whether or not to purchase a new house, and if so, where should I buy it. I also considered if I should buy a preexisting new house or hire a builder for a new house. Every option had its own set of potential risks. If I continued to rent, was this really just throwing away money. If I purchased a house, could I afford it and was I buying the best house for me and my family? I approached it like any other project, with interviewing people, note collecting, collating, and interpreting the data. After reviewing my expenses and income and examining the tax advantages, I decided to buy a house but knowing that several risks may accompany my decisions, these risks rank from high probability...
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