Predicted ‘Wave’ of Microbiz Foreclosures Not Showing Yet
Jun 1st, 2009 | By Dawn Rivers Baker | Category: EconomyLate last year, the MicroEnterprise Journal reported on new research that seemed to indicate a looming housing crisis that could render hundreds of thousands of microbusiness owners homeless and their businesses dust and ashes in the near future. (See “Second Wave of Foreclosures Threatens Micros” in the December 1, 2008 issue of the Microbusiness News Briefs.) That was because of the number of microbusiness owners holding toxic mortgages, such as Alt-A, Alt-A ARMs, Option ARMs, and Interest-Only mortgage finance products, according to research by Dr. Samuel D. Bornstein and Jung I. Song, CPA of Bornstein & Song, CPAs and Consultants.
At the time, there was much jumping up and down and yelling that someone would have to do something to keep this terrible stuff from deepening the recession. The toxic mortgages in question were supposed to begin to reset in the 4th quarter of 2008, which means that we are close to three full calendar quarters into this new foreclosure crisis. Granted, the sparrows were only supposed to start falling this early before presumably gathering momentum, until the foreclosures began to resemble a sparrow downpour. Dr. Bornstein continues to yell with unabated fervor but, as of right now, there is little evidence that the predicted ‘tsunami’ has even gotten started. Certainly, this is a situation that bears continued vigilance. So far, however, hysteria seems unnecessary.
