Equities First Holdings Enabling Financial Innovation to Curb the Lending Crisis

Financial innovation is the continued development of financial items that are designed to achieve specific client objectives. However, the so called “innovation” over the last few decades led to products that dramatically expanded leading to the present crisis. Some of the former products include the adjustable-rate mortgage, fixing of subprime mortgages into MBS (Mortgage-backed securities), Collateralized Debt Obligations (CDO) for investors trading, which was a kind of securitization and a type of credit insurance referred as Credit Default Swaps (CDS). The products varied in complexity and the way they could be valued in the records of financial institutions and more information click here.

Issuing of CDO grew from an approximation of $20 billion within Q1 2004 into its peak of more than $180 billion by Q1 2007 before declining back below $20 billion by Q1 2008. More so, the CDO’s credit quality went down from 2000 to 2007 as the amount of subprime among other non-prime mortgage debts grew from 5% to 36% in terms of CDO assets. As per the subprime lending, the CDS and its portfolio known as synthetic CDO allowed a theoretically infinite sum to be wagered into the finite aggregate of housing loans outstanding, given that sellers and buyers of the derivatives could be traced. For instance, purchasing a CDS with the aim of insuring CDO ended exposing to sellers with similar risks as if they possessed CDO, after the CDOs became worthless and read full article.

Despite the aftereffects of the financial crisis, Equities First is a great company that is turning the products of financial innovation for the benefits of potential borrowers. With most banks’ regulations making borrowing difficult, Equities First is working to deliver on its missions of providing affordable and easy loans using stock as collateral. The loans have non-recourse feature, thus in case of default, they are not followed by the lender. Also, the non-purpose feature ensures investors can use their loans according to their choices and Equities First of Linkedin.

James Dondero Sets Up Grant to Help Family Violence Victims

James Dondero, the co-founder and president of Highland Capital Management, L.P. has announced a new challenge grant through the philanthropic arm of his company, Highland Dallas Foundation, Inc. Dondero’s company is an SEC registered investment advisory company that is one of the top in its field. Highland Dallas Foundation, Inc, the philanthropy arm of the company, invests in both local and national non-profits.

The challenge campaign is a matching program, with Highland Dallas Foundation matching 50% of funds donated, up to $1 million dollars. This matching campaign will continue until April 17th. The beneficiary of this grant is The Family Place, which supports victims of family violence in Dallas. The announcement was made October 4th, thus covering the last 6 months of the campaign by Family Place

When kicking off the challenge grant, Dondero praises The Family Place and their efforts. Dondero feels that not only are they a lifesaving program, but one that has managed their fundraising well, making them great recipients, and thus multiplying the efforts of people who are currently donating funds. James Dondero supports this effort as a lifesaving effort needed in Dallas.

The Legacy Campaign by The Family House is supporting building a new counseling center for family violence victims. The center will be named for Ann Moody. It will offer many different services, including emergency shelter and family violence prevention education programs for all ages. It will even include an animal shelter for those who do not want to leave animals behind in an abusive situation.

James Dondero’s promise will help bring The Family House Legacy Campaign much closer to completion and have the services needed by Dallas that much closer to being available. With only $2.8 million dollars more needed, his $1 million dollar promise is valuable help for a needed project.

Additional Sources:

http://www.bloomberg.com/research/stocks/private/person.asp?personId=2159086&privcapId=37846394

https://www.facebook.com/James-Dondero-559538574174652/