A few bad apples give microfinance a bad name

 Hi everyone, this is Jeff Rutt. In the world today many of our problems can be traced back to greed and self-interest.  Individuals and companies looking to cheat the system to make a few extra dollars are everywhere. Unfortunately in our sinful world greed has taken its toll on the microfinance industry as well. The article below provides some details on how a few bad organizations looking to make some extra money have cast microfinance in a negative light. When people take advantage of others for their own gain it is sad. Thankfully God has called his followers to be salt and light to the world, and example of His love. At HOPE we seek to be the salt and light of the microfinance world not only to those we serve but to others who may be watching us as well. Are you frustrated by greed and corruption in your world? If so take this opportunity to be the change you seek, by being salt and light in your community or workplace.

Many Blessings,
Jeff Rutt

A few bad apples give microfinance a bad name

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MICROLENDING IS one of the most effective ways to help the world’s very poorest out of poverty. Tiny loans of $10 or $20 can help struggling families start small businesses that are the difference between chronic hunger and financial success. For a subsistence farmer in Kenya, or a bicycle taxi driver in India, microcredit institutions are often the only place to turn to for credit, banking services, and life insurance.

But, after years of explosive growth, the world’s microfinance sector is in trouble.

According to a recent report by the Micro­credit Summit Campaign, the number of clients served by microfinance institutions has declined from 205 million to 195 million. That’s the first drop since the group started keeping track in 1998.

Most of the decline can be attributed to one place: Andhra Pradesh, India, where the rapid commercialization of microloans led to abusive practices. At first, most micro­loans came from nonprofits dedicated to helping the poor. But as the sector grew at a rate of 200 percent per year, other institutions got into the business. Some of them lent more than the clients could afford to repay and used harsh practices to collect. Negative press and a rash of debtor suicides spurred a government crackdown on the sector that severely restricted microlending.

A backlash against microfinance has cropped up in other parts of the world including Bolivia, where opportunistic politicians and disgruntled clients blockaded the offices of microfinance institutions, causing repayment rates to plunge.

These are cautionary tales about what can happen when institutions appear to be more interested in their own growth than the financial well-being of their clients. For-profit groups that charge high interest rates and pay high salaries to their own executives give microfinance a bad name. They are making money off the backs of the poor, not giving the poor a leg-up. The good guys in this industry should do their best to sound the alarm against such practices. ­Microcredit is a crucial tool against poverty, and its reputation must be preserved.

Article posted on http://bostonglobe.com/editorials/2013/02/21/few-bad-apples-give-microfinance-bad-name/Gmk3kSMzXD7oxhmTs1x24M/story.html

Thanks again for reading, stay tuned for more articles and comments-Jeff Rutt

Housing emerges as economic bright spot after years in the dark

Hi everyone, Jeff Rutt here.  As we all know 2012 turned out to be a good year for the housing industry and it looks as though things could continue to stay positive through 2013. According to the report below, overall home sales are at their highest rates since before the recession. More home sales means more competition and higher home sale prices for sellers. This is excellent news for builders or individuals looking to sell their existing homes. I hope you will enjoy reading the article below.

Many Blessings,
Jeff Rutt

Housing emerges as economic bright spot after years in the dark

The nation’s housing market is surging again after years of historic declines, and the unique forces powering its return could last well into 2013.

The number of homes for sale is at its lowest level since before the recession, sparking competition among buyers that has led to 10 straight months of price increases. The volume of activity is the highest since 2007.

U.S. home prices were pushed higher by rising sales and a tighter supply of available homes.

Builders broke ground in December on the most new housing developments in four years. And interest rates on mortgages are expected to remain near all-time lows through much of the year, galvanizing once-skeptical buyers.

Together, those factors have helped the beleaguered housing market regain its footing and emerge as one of the economy’s bright spots this year.

“I said to my husband, ‘We’ll never see this again in our lives,’ ” said Tracy Lamb, who recently purchased a three-level home in Gainesville, in Prince William County. “I really did feel like we were going to miss out.”

Industry experts caution that the market’s recent strength does not signal a return to the heady days of the housing boom. Nearly 11 million homeowners are still underwater, owing more than their homes are worth, and prices remain well below their peak in 2006. Government data showed a larger-than-expected drop in the pace of home sales last month. The Federal Reserve has begun debating when to withdraw support for the mortgage market, and economists expect interest rates to rise before the end of the year, potentially tempering demand.

But there is growing consensus not only that the bottom has been reached, but that the housing recovery is real. In the Washington area, that translates into construction crews again mobilizing in some of the region’s hardest-hit counties. In Lamb’s burgeoning community of Madison Crescent, workers shrugged off the snow last week to install wiring and plumbing in a row of new townhouses. The single-family homes across the street sold out this month.

The return of real estate marks a key milestone in the country’s economic recovery — and not only because it was at the root of the collapse. A healthy housing sector could boost gross domestic product by more than $400 billion, based on housing’s historical portion of the overall economy. It is also a major source of new jobs in construction and indirectly supports industries as varied as retail and local government.

Mark Granville-Smith had planned to build a high-end community called Gaslight Landing on the banks of the Occoquan River in Prince William, where his company, Classic Concept Builders, has worked for more than two decades. He sold six units during the height of the housing boom — then the project stalled as the industry imploded. With the county processing as many as 700 foreclosures a month, there was little appetite for luxury townhouses with elevators and boat slips and price tags reaching nearly $1 million.

But Granville-Smith said he began getting calls from interested buyers again this past summer. So he called the construction crews back to work and sold four homes within three months. He recently got a request from a prospective purchaser in Michigan for a waterfront lot.

"The market’s reached a price point where it’s economically feasible to build again,” Granville-Smith said. “We’ve gotten a tremendous amount of interest.”

Housing historically accounted for an average of 4.8 percent of the country’s economic output but has been contributing only about half that amount since the recession. The gap between the industry’s normal output and its current activity is $413 billion, translating into a 2.6 percent boost to GDP.

Particularly important is the role of new-home construction, a significant creator of jobs. Home construction jumped 28 percent last year, helping to drive a rebound in hiring in a sector that was decimated during the recession. An analysis by the National Association of Home Builders, a trade group, calculated that each new home generates as many as three jobs.

Local home builder Miller & Smith employed about 150 people during the boom, then slashed its staff to 80 in the midst of the bust. Now the company is back up to about 100 employees and hopes to hire four more this month.

“It’s been a difficult six years,” said Dale Hall, vice president of operations. “It’s been enjoyable to watch the turnaround.”

That doesn’t mean there haven’t been reality checks. The Mortgage Bankers Association reported that applications for mortgages dipped in December. Sales of existing homes also declined last month, though prices continued to increase. And an index of pending home sales fell 4.3 percent in December when economists had expected it to remain flat.

“We believe the disappointment represents just a brief lull in what are volatile data rather than a fundamental change of direction, but, of course, that remains to be seen,” said Jim O’Sullivan, chief U.S. economist at the consultant firm High Frequency Economics.

Part of the problem may be that many households, because of tighter credit requirements, are unable to take advantage of low interest rates. The Fed will probably discuss the state of the housing sector during its regular policy-setting meeting this week, though it is not expected to begin pulling back on its support of the mortgage market yet.

Some analysts say the weak December results are actually a symptom of limited supply rather than slackening demand — the inventory of homes on the market dropped 8.5 percent last month to the lowest level since May 2005.

In addition, the pipeline for new homes has been constricted. In Prince William, for example, government data show that more than 5,000 applications to build new homes were filed in 2004. Last year, that number was about 1,200.

Hall said his company has focused on finishing projects started during the boom. It is scouting for sites to build new developments, but the permitting and approval process can take two years or longer.

Buyers may not be so patient. Traditionally, the real estate season does not start until March. But Hall said Miller & Smith has already booked 40 home sales this month, making it the company’s best January since 2005.

“I think the kickoff has already started,” he said.

Article posted on http://www.washingtonpost.com/business/economy/housing-emerges-as-economic-bright-spot-after-years-in-the-dark/2013/01/28/68c4bd74-6700-11e2-9e1b-07db1d2ccd5b_story_1.html

Thanks again for reading, stay tuned for more articles and comments-Jeff Rutt

Bernanke Says Fed Will Do What It Can to Support Housing

Hi everyone, this is Jeff Rutt. Since the election there has been increasing talk of a fiscal cliff and how the country will deal with the looming debt crisis.  For professionals in any industry, the economy is a central concern. This year, the housing market began to rebound as interest rates lowered and more people were able to afford homes. Although there is still a long way to go, the fed has promised to help push the recovery forward. It is difficult to say whether or not the fed’s actions will be beneficial.  As American’s let’s continued to pray that our government makes wise decisions in regards to our economy as they seek to tackle our fiscal problems.

Many Blessings,
Jeff Rutt

Bernanke Says Fed Will Do What It Can to Support Housing

Federal Reserve Chairman Ben S. Bernanke said the Fed will take action to speed growth and a rebound in a housing market facing obstacles ranging from too-tight lending rules to racial discrimination.

“We will continue to use the policy tools that we have to help support economic recovery,” Bernanke said today in a speech in Atlanta, Georgia.

Bernanke is pressing on with record easing including a plan to buy $40 billion a month of mortgage-backed securities, aiming to spur growth and reduce a 7.9 percent unemployment rate. He has resorted to unorthodox policies six years after home prices started a plunge that knocked the economy into the longest recession since the Great Depression.

Bernanke said while tighter credit standards after a collapse in the subprime mortgage market were appropriate, “it seems likely at this point that the pendulum has swung too far the other way, and that overly tight lending standards may now be preventing creditworthy borrowers from buying homes, thereby slowing the revival in housing and impeding the economic recovery.”

Some members of the Federal Open Market Committee said monthly mortgage bond purchases by the Fed are “likely to reinforce the nascent recovery in the housing market,”according to minutes of their Oct. 23-24 meeting released yesterday. FOMC members “generally agreed” that a housing recovery is at last under way.

Bernanke endorsed that view in today’s remarks at the Operation Hope Global Financial Dignity Summit, saying an industry that was holding the economy back has turned a corner.

Housing Weakness

“Continued weakness in housing -- reflected in falling prices, low rates of new construction, and historic levels of foreclosure -- has proved a powerful headwind to recovery,”Bernanke said. “It is encouraging, therefore, that we are seeing signs of improvement in the housing market in most parts of the country.”

Bernanke said housing-finance authorities have taken steps to “remove barriers to the flow of mortgage credit” and referred to efforts by the Federal Housing Finance Agency and by Fannie Mae and Freddie Mac to clarify rules surrounding mortgages that go into default.

These steps, the 58-year-old Fed chief said, should“increase the willingness of lenders to make new loans.”

Economic Recovery

While regulatory policy “will be important for restoring a fully functioning housing and mortgage market, the strength of the overall economic recovery is crucial as well,” Bernanke said.

The Standard & Poor’s 500 Index declined 0.2 percent to 1,352.52 at 3:01 p.m. in New York, after falling as much as 0.6 percent. The index closed yesterday at the lowest level since July.

A number of FOMC officials believe the central bank may need to expand its monthly purchases of bonds next year after the expiration of a program to extend the maturities of assets on its balance sheet known as Operation Twist, according to the minutes released yesterday.

The Fed’s actions have helped push mortgage rates to historic lows. The average fixed rate on a 30-year mortgage fell to 3.34 percent today, according to a Freddie Mac index, the lowest on record.

Those rates have increased affordability and helped bolster home price. The S&P/Case-Shiller index of property values in 20 cities rose 2 percent in the year beginning in August 2011, the biggest annual gain since July 2010.

Supporting Gains

Increasing home prices are rippling through the economy, supporting gains in consumer confidence and spending and benefitting companies such as Home Depot Inc. and Whirlpool Corp.

Home Depot, the largest U.S. home-improvement retailer, posted third-quarter profit this week that topped analysts’estimates as the recovering housing market prompted customers to spend more on home repairs.

“Homebuilder sentiment has improved considerably over the past year, and real estate agents report a substantial rise in homebuyer traffic,” Bernanke said.

The S&P Supercomposite Homebuilding Index, which consists of 11 home building companies, climbed 65 percent this year as of yesterday, compared to 7.7 percent for the S&P 500 Index.

Americans bought new homes in September at the fastest pace in two years, the Commerce Department reported last month, with demand up 27.1 percent from a year earlier.

Economy Grew

The economy grew 2 percent in the third quarter, propelled by gains in consumer spending, defense outlays and homebuilding. That was a quickening from the 1.3 percent pace the Commerce Department reported for the second quarter.

Equities reached a high for the year on Sept. 14 and have since tumbled 7.5 percent as lawmakers have yet to resolve the so-called fiscal cliff, a combined $607 billion in automatic spending cuts and tax increases. The Congressional Budget Office said that failure to address the cliff could nudge the economy into a recession.

President Barack Obama said in a press conference yesterday that voters sent a “very clear message” on election day this month that they want both parties to work together to cut the budget deficit with a mix of tax increases for the wealthy and cuts in spending.

Article posted on http://www.businessweek.com/news/2012-11-15/bernanke-says-fed-will-do-what-it-can-to-support-housing

Thanks again for reading, stay tuned for more articles and comments-Jeff Rutt

Jeff Rutt: Home Building Surges as Confidence Grows

Hi everyone, this is Jeff Rutt with some great news on the home front! This year has continued to be a landmark year for the housing market in terms of recovery. This week there is more good news that homebuilding has continued to remain strong and is even growing. The article below from the Wall Street Journal discusses how homebuilding has surged in the last month throughout the nation. One of the most encouraging side effects of the housing surge is the opportunity it creates not only for new homeowners but for unemployed individuals looking for work. Not only does the increase in homebuilding provide more jobs, it also helps to increase the amount of taxes being paid to local governments. Hopefully progress in the housing market will continue and become a major contributing factor to overall economic recovery.

Many Blessings,

Jeff Rutt

Home Building Surges as Confidence Grows

Residential construction picked up momentum in September and now is running at its highest level in four years, a turn that could have a positive effect on the jobs market and the broader U.S. economy.

Builders started work on new houses and apartments at a seasonally adjusted annual rate of 872,000 units last month, the Commerce Department said Wednesday, up 15% from August and 34.8% from September a year ago, far exceeding economists' expectations. The level of starts was the highest since July 2008.

Many economists contend that the rise in construction, if sustained, could boost job creation and economic growth. The National Association of Home Builders, a trade group, estimates that each home built generates three full-time jobs and $90,000 in new tax revenue.

"The path between here and when we get to a sustainable pace of home building, should add, cumulatively, up to two percentage points" to the nation's gross domestic product, said Michael Feroli, chief U.S. economist at J.P. Morgan Chase & Co. "It could take three or four years, but at the pace we're going at now, we might get there sooner rather than later."

The government report showed new building was up in three of four U.S. regions. Building rose 20.1% in the West, 19.9% in the South and 6.7% in the Midwest. New construction fell 5.1% in the Northeast.

Some economists say a continued rise in construction could further drive down the unemployment rate, which fell to 7.8% in September from 8.1% in August. Between 2007 and 2011, more than 2.1 million construction workers lost their jobs, according to the Bureau of Labor Statistics, and since then, only 273,000 have been hired back.

The recent growth in residential building "gives some hope in the coming months for more construction jobs," said Anika Khan, a senior economist with Wells Fargo WFC +0.29%. "A lot of construction workers are the ones who have been discouraged and underemployed, on the sidelines. If these particular workers find work, it will have a big overall economic impact, because it will boost wage and salary growth and income growth."

In September, the number of new building permits, an indication of future construction, rose 11.6% to an annualized level of 894,000, also the highest level since July 2008.

Starts on single-family homes, which made up 69% of housing starts last month, rose 11% in September to a rate of 603,000 units, a 43% improvement from a year earlier.

The pop in home building also suggests a divide between consumers and industry in the economic recovery.

While businesses continue to hold back on big investments because of uncertainty surrounding the coming elections and changes to the tax code, consumers' attitudes are brightening, pushing up spending on goods such as new homes.

"Consumption indicators seem to be pretty strong, while investment indicators seem to be pretty weak," said Paul Ashworth, chief U.S. economist for Capital Economics. "The fiscal cliff and what's happening in Europe should be driving consumption and industrial numbers in the same direction. But in this case, consumers don't seem to be as aware as businesses are."

Craig Perry, president of Centerline Homes, a Coral Springs, Fla., builder, said in the past six months he has started construction at three developments in Orlando and Broward County in South Florida, and nearly all 136 homes in the communities are under contract.

"We're seeing a much better attitude among buyers," Mr. Perry said. "People feel like home prices are rising, and mortgage rates are very low. So before prices rise too high, people want to get in on it."

Another reason for the jump in new-home construction is that inventories of previously owned homes and foreclosed homes have declined, spurring some buyers to begin looking at new properties.

The National Association of Realtors reported last month that at the current pace of sales, it would take 6.1 months to sell the listed supply of homes, down from 8.2 months of supply a year ago.

This month, CoreLogic Inc., CLGX -2.29%a real-estate data company, said the "shadow inventory," or the pending supply of homes that are delinquent or in foreclosure and could ultimately be listed for sale, fell to 2.3 million units in July, or a supply of 6.0 months, down 10.2% from a year earlier.

Ilin Misaras, who coordinates international programs for students at North Carolina State University, and her husband recently paid $500 to a builder in Raleigh, N.C., to reserve a piece of land for a four-bedroom house to be built next year. The couple plans to pay about $245,000 for the home and aims to move in next August.

Ms. Misaras, who is 30 years old, said she and her husband are watching their spending. They canceled a trip to England, France and Italy to put the money toward their new home—but they aren't worried about the economy.

"We are looking at the economy, especially in our area, the Triangle, as skyrocketing right now," Ms. Misaras said.

Once she gets a pending pay raise and her husband finishes his studies to become a registered nurse, she expects their household income will go up. "The stars are just kind of aligned for us right now," she said.

While this year's housing starts are up from a low of 478,000 in April 2009, they are still below the historical average. Builders have started construction on about 1.5 million new homes a year since 1959, to keep up with household formation which has run at an average of 1.27 million new homes a year, according to Census data analyzed by Moody's MCO +1.44%Analytics. 

U.S. households, many of which doubled up during the economic downturn in order to save money, have been growing by just over one million a year since 2008.

"My gut tells me it's the demographics kicking in," said Patrick Newport, an economist with IHS Global Insight. "At some point, builders are going to have to ramp up at a very steep rate. That's what's kicking in here. Construction has just been depressed for too long."

Article posted on http://online.wsj.com/article/SB10000872396390444868204578062310255566972.html

Thanks again for reading, stay tuned for more articles and comments-Jeff Rutt

Jeff Rutt: A home builder’s philosophy

Building a home requires efficiency, perseverance, and a positive attitude, three principles that Jeff Rutt once lived by as a dairy farmer. Before making a career move into home building, Rutt and his wife owned and operated a 200-acre farm in Pennsylvania. Being in the farm business for over a decade, Rutt felt that he could find another way of earning a living that is not as strenuous and that offers less risk, which resulted to his decision to start a business in home building.

From JEFF RUTT

Founded over 18 years back, Keystone Custom Homes now lives by the same principles that Rutt once used in farming. The company always puts their customers first by implementing a rigorous quality assurance process for each house built that is sure to leave customers completely satisfied. Jeff Rutt and Keystone are proud to offer a limited 20-year warranty and 25-year roof warranty that comes with each house a customer buys, to assure families that the house they will be purchasing is a well-built house.

From Jeff Rutt

Bestowed with the Best Builder Award by the Builder Magazine for three years: 1998, 2002, and 2005, Keystone Custom Homes is now ranked as one of the top 100 home builders in the United States. The company’s philosophy of ‘giving the customer great value and great service’ at all times, is definitely a philosophy that works.

From JEFF RUTT

Learn about great deals by Keystone Custom Homes by visiting www.keystonecustomhome.com.

Jeff Rutt gives HOPE: How small things make a big difference

The success story of Jeff Rutt revolves around his vision of the future and his perseverance to reach his goals.


A then-farmer working long hours in the field, Jeff Rutt decided to stop farming and get into a new business venture. According to him, he wanted something with lower risk and fewer work hours. In 1992, he founded his own home-building company, Keystone Custom Homes, which has since then achieved a lot, including some renowned awards and commendations.

From JEFF RUTT

Part of the earnings of Keystone goes to another venture that Jeff Rutt established in 1997, HOPE International. It is a Christian, non-profit organization that provides practical and attainable solutions to the poor around the world. For more than a decade, Jeff Rutt’s foundation has achieved greater heights with over 260,000 clients worldwide.

From JEFF RUTT

HOPE International helps out the less fortunate by providing excellent microenterprise development and financial services. A sample support offered by HOPE is a simple monetary loan, which the individual may use as capital for starting a business. The success stories that HOPE International has as of the moment attest that a small act can make a big difference especially when it is done for good. Moreover, the desire of the individual to succeed and change his/her life contributes to the triumph.

From JEFF RUTT

A spiritually motivated organization, HOPE International continues aiming for more success by reaching more areas that need support and bringing more dreams to life.

HOPE is open for partnerships, especially for its international operations. To know more about HOPE International, log on to www.hopeinternational.org.

The Importance of Savings for Microfinance

Hi everyone, this is Jeff Rutt- if you're interested in how HOPE works by providing both loan AND savings programs for those less fortunate, please enjoy.

Imagine a world in which you paid the bank to hold your money… Perhaps worse, imagine being forced to hide your life savings under your mattress, without a lock or even a door to protect that which is needed to give your family a better life. Welcome to a world without savings- a world without the simplest of institutions allowing men and women the opportunity to responsibly store and save their earnings for tomorrow. While it is a world we can scarcely imagine, it is nevertheless a grave reality for millions around the globe every day. At HOPE International, we recognize the necessity of not only offering diverse and effective loan products to our clients, but complimenting the ability to borrow with the opportunity to save as well. While loans are critical to furthering economic development through providing the capital to help small businesses grow, perhaps nothing catalyzes financial and therefore social change like the impact of saving. HOPE International partners with communities to create Saving Circles; groups of men and women bound in solidarity coming together to consolidate and protect savings. It’s extraordinary to witness the solidarity and determination exhibited by members. Previously, members were often subject to gross mistreatment as they sought to bring themselves and their families out of poverty- while loan-sharks have become part of our vernacular, we often forget that savings-sharks are equally dangerous and sometimes as prevalent. Imagine investing one-hundred dollars throughout a year but only receiving fifty upon your return… welcome to the sad state of living without a bank or financial institution, controlled by those that prey on the powerless. And yet people continue to participate, simply because they are desperate to save for their families, no matter how little the percentage return. Therefore, HOPE International partners with local churches and communities in the form of Savings Circles, an incredibly effective tool for rebuilding dignity and fostering development. Members of the Circle join together to create their own “bank”- while the specifics vary by country and culture, member’s pool savings and offer loans to other members, allowing access to the lump sum of capital needed to weather an emergency or help a business grow. All the policies and funds are provided by the individual members; HOPE simply assists in the education and maintenance of the group. This means that Saving Circles reflect the same Christ-centered philosophy of servanthood that HOPE has always represented- the preservation of dignity for every man, woman and child created in the image of God. 

Thanks for taking the time to read, 

-Jeff Rutt