Financial situation in the whole world is not stable now. The crisis has shaken the economies of all countries and the United States of America is not an exception. The specialists try to do all possible to protect economic field from more damages, and to save as much money supply as it is possible in the current situation. The system, which has been working for many years, does not help now, so the new strategies should be developed to overcome the crisis with less loses in the financial sphere.
The loans may be of different nature and applying different conditions: the interest rate, payment schedules, fees and other terms are different. But now the situation with loans is very difficult and all loans are in the same situation. This position of business is predetermined by the current financial situation which appeared all over the world.
Current financial situation cannot avoid disturbing groups of lenders and mortgage services. The inconveniences, which have touched these sides of financial relations, have created lots of difficulties and have almost put them “on the verge of open warfare” (Dizard). The situation with loans is very complicated. The holders of senior debts were sure that the situation was under the control of professionals, that they were insulated from risks, but they appeared to be mistaken. Their financial capital is locked in the loans, and nobody knows how long they will not have any access to money.
A lot of solutions to the problem have already been offered. The special services should take into consideration the points of view and interests of all sides and to create a plan how to come out of the situation. The defenders of the special services, which aimed to maintain order in the situation, insist that the net present value of the loans in work-out should be maximized by special services.
The net present value of the investment (NPV) is the difference between the investment’s market and its cost. The net present value of the investment shows the profit which will be gained by investment in this or that project. One fact should be noted that a quick pay back is not a pledge for a good investment. The reason is that the period of repayment has severe shortcomings. It is a rule of net present value of investment, and nothing can be changed in the situation. The net present value of the investment can be calculated by the formula
The certificate holders want to get their money back. The services which have to work under the problem do not hurry to do their direct obligations and they have infuriated the lenders. The companies, which responsibilities are to cope with the problems about troubled loans, usually earn 25 basis points in annual servicing fees on those loans. Moreover, they usually get 1% of payments they managed to collect, or the other variant is to receive 1% of the recoveries of liquidation.
The current positions of business, the problems, which appear with paybacks, have brought some changes in the case with percentage share of special services which deal with the loans. In current situation these services are asked to buy the small pieces of the debts, in order their clients were sure that the special services do all they can to release their finances.
The personal interest is the best force in any case. When the professional deals with the case where his or her money are involved, the situation is developing with the other speed and the results are achieved faster.
Using the net present value, the specialist may calculate and analyze the time constraints when the time is the most acceptable to take up these investments. The net present value of the investment should have been made at the very beginning, when people only planned to invest their money. And these evaluations were made. But the crisis has ruined all estimates and the situation should be fixed now, till it is not too late.
The panic which appeared at the very beginning of the crisis begins to calm down. People start to understand that the current position of business is temporary. If all lenders come and demand their investments back the financial system of the United States may not endure. The economical system is very weak now and both sides should understand that the situation will not last for ever. The best thing, which may be done now, is to calm down and wait. The situation is going to be changed soon and businessmen will be able to decide whether to get back their money or to leave them for further time. The net present value of the investment is going to be a good adviser in the situation.
In sum, there is a huge problem with loans in the United States. People want to receive their money back in the conditions of the current crisis. The problem is that the current crisis does not allow running business according to past strategies. Some time should past and the financial system will again become balanced.