Banks-

Enough cannot be said about the financial condition of banks today. Many banks across the world have closed already. In 2008 in the United States over 25 banks closed. Some banks you might not recognize like Sanderson State Bank in Texas or Haven Trust Bank in Duluth Georgia. Others, like large bank Downey Savings in California had $12.8 us billion in assets when it closed. Of course there was a tremendous amount of consolidation with major banks with major risky assets on their books such as $307us billion Washington Mutual. One of the well know bank’s whose downfall was very public was IndyMac bank one of the first major banks to be rescued by the FDIC.

Besides banks, major insurer’s also suffered greatly by their packaging and buying mortgage backed securities causing insurers like AIG which needed over $180 us billion bailout from the government. Investment companies merged also like Bank of America buying one time Wall Street giant Merrill Lynch. One large investment firm, Lehman Brothers was allowed to fail.

The Troubled Asset Relief Program, called TARP, was supposed to curtail the banking industries problems and get banks to begin writing loans and losing up the credit market. The first $350 us billion dollars issued to the banks did virtually nothing. There was no accountability or understanding the on the bank’s behalf and most ended up hording the money and holding on to it rather than releasing it in the form of loans as was the original purpose.

President Obama continues to be publically vocal about fixing the banking problem in the United States. New Treasury Secretary Timothy Geithner has promised he is looking into a range of options with details to be released soon. There are three main options being seriously considered.

The first is the government acting as a “bad bank,” buying bad assets currently on banks’ balance sheets. That would eliminate their risk of holding those assets and give them positive momentum in writing good loans again. This strategy has roots in how the government solved the savings and loan crisis through the Resolution Trust Corporation in 1989.

The second option is another round of capital infusions as when former Secretary Hank Paulson purchased 350 billion in bank’s preferred stock. This time the Obama administration may do this again but with more money and buying common not preferred shares of bank’s stock. The need for this type of plan is based on the massive sell-off of bank stocks by investors so far this year. Many people view this as a step closer to nationalizing banks which many Wall Street types see as a very dangerous move. Some of the banks have started to pay this money back.

The third major initiative would involve insuring bank’s assets. This would mean placing a “floor” on the prices of these bad assets and guarantee them future losses beyond that point. The government has already done that to some degree with Citigroup and Bank of

America whose stocks are already battered down to just a few dollars per share. There is a widely shared view that the difficulty of this plan would be pricing what the banks would pay for this insurance.

Clearly the start of the problem is with housing. (or the easy money of the 90’s) Many consumers should not have received loans. Most got larger loans than they could afford. Often times these “no doc” loans where no proof of income or assets were loans that came with a big price- a low interest rate upfront with a huge balloon after 5 or 7 years. When those loans re-set they became completely un-affordable to them. Because these were exotic loans to begin with many put no or very little down on their home and when the trouble came- they simply walked away leaving the house vacant. Now some entire communities and developments are completely empty. There is no way for asset holders to re-coup any of their money except to foreclose on the house and put it up for sale for pennies on the dollar.

That in turn is creating a huge loss of wealth for the American homeowner. People who paid $500,000 for their home may owe a significant chunk of that on their loan, yet their neighbor’s house across the street is now worth only $200,000 because it’s been foreclosed. This too is causing homeowners in good standing to walk away from their house because they are so upside down and don’t feel their home will ever be worth what they paid for it.

There are other hardships today too. With unemployment at an all time high and many companies letting go thousands of people, many just don’t have the money to pay their mortgage. Further, many ARM loans will now be re-setting forcing consumers to re-finance at a higher rate or to not qualify for a loan today at all.

The trickle down effect of the economy only delivers more bad news to the housing market. In many areas 75% or more of housing sales are foreclosures and many experts think it will be years before all of the foreclosures are out of the market and housing can rebound.

Another trickledown effect is China has started to change international banking. China has used it’s power in the Asian Development Bank to delay loans to India. India stopped China from taking land away from them in 1962. This is the future of China’s influence in multilateral financial decisions. China leaders have no problem in seeking its interests by using ADB, Organization for Economic Co-operation and Development, or the International Monetary Fund to get oil, raw materials, or markets in the Third World. China sees power projection as more important than partnership with others. China’s leaders see themselves on a ride with a tiger, with a aging population and a people who have tasted freedom. China and its front companies using banks and cash, will start to take control of raw materials across the world. ie: Brazil’s oil fields China still has the near term problem of exports down over 40%

Back to the US, Banks are looking to convert these homes as into cash as fast as they can. With foreclosures being the major of the real estate business today, many are rushing into

the REO market without experience in selling foreclosed homes. Real Estate people without experience in REO sales can make the process harder, more difficult to close transactions and don’t give the banks the best return they could get when working with an REO expert.

Leadership is never easy, but it’s incredibly tough today. The global financial system is basically paralyzed, the recession is the largest in most peoples’ lifetimes, and trust in institutions and the people who lead them is at a all time low. Who better to put the subject of crisis leadership in perspective than a local Southern California company, Terra Asset Management.com who IS the expert in liquidation risk and works to sell property to interested and able parties. Operating in Palm Springs, Terra Asset Managers have unique foreclosure expertise and are the leading foreclosure specialists in Southern California. Terra Asset Management.com can cut your time of sale down. Equally important, Terra can limit your liquidation risk and most importantly Terra has the resources and the relationships to get your property sold quickly.

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Step 1: Terra takes over the property so you don’t have to be involved We give firm direction towards achieving the goal of selling.Step 2: They put it on the right path. They will handle all repairs or other things

that may keep you from selling it quickly.Step 3: Terra handles all of the day to day operations of the property including

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money back into your pocket.

Terra Asset Management is a full services real estate firm and has contractors, CPA’s, legal and other help that may be necessary for you to sell your property.

Terra Asset Managers does not just lead an organization of people; we manage the reality in which we operate. This requires confronting the market as well as delivering new opportunities. It calls for managing past failures as well as today’s success. The effective manager is a screen through which the people he leads experience the realities of the marketplace, of competition and changes in the economy, of success, and of failure. We change past failures in to present successes.

If you are a bank or asset holder and have foreclosed properties, multi-units or larger projects and you need them turned into positive results, call the experts, Terra Asset Management.com (760) 408-8998 .or reolord@aol.com