Personal Finance News Nov 2008

Rep Frank targets mortgage service legal pacts
Reuters - Congress needs to tackle legal obstacles that prevent mortgage servicing companies from doing more to help distressed borrowers stay in their homes, the head of a U.S. congressional committee said on Wednesday. (Wed, 12 Nov 2008 20:21:44 GMT)

Many mortgage indictments seen under Obama
Reuters - Federal criminal probes into mortgage lending will likely produce many indictments under Barack Obama's presidency, legal experts said on Wednesday. (Wed, 12 Nov 2008 22:45:55 GMT)

Stocks plunge for third straight session
AP - An increasingly despondent Wall Street fell for the third straight session Wednesday as investors absorbed another series of dismal corporate reports and news that the government won't buy banks' soured mortgage assets after all. The Dow Jones industrials dropped more than 410 points, and all the major indexes lost more than 4 percent. (Wed, 12 Nov 2008 23:19:40 GMT)

U.S. backs away from plan to buy bad assets
Reuters - The Bush administration on Wednesday largely abandoned its plan to buy up toxic mortgage assets and said it will focus its $700 billion financial bailout fund on making direct investments in financial institutions and shoring up consumer credit markets. (Thu, 13 Nov 2008 01:41:59 GMT)

US shifts rescue away from buying toxic mortgage assets
AFP - US authorities shifted the focus of a massive financial rescue plan, scrapping plans to buy up toxic mortgage assets and calling for help in restoring credit outside the banking sector. (Thu, 13 Nov 2008 03:11:38 GMT)

Mandel: Paulson's Shift Is Just a Start
BusinessWeek Online - Listening to Hank Paulson's Nov. 12 speech, one is impressed both by his flexibility and a barely controlled underlying sense of panic. In a few short weeks, the Treasury Secretary has gone from a bailout plan focused solely on using $700 billion to buy up mortgage-backed securities to one that may not spend any money at all on mortgage-backed securities. Instead, as he announced Wednesday, much of the remaining money will be used to support consumer loan markets that have frozen up -- credit-card debt, student loans, and auto loans. ... (Thu, 13 Nov 2008 13:08:42 GMT)

Ranieri's Franklin Bank files Chapter 7 bankruptcy
Reuters - Franklin Bank Corp , the lender founded by mortgage securities pioneer Lewis Ranieri, filed for bankruptcy protection and plans to liquidate, after federal regulators seized its banking unit. (Thu, 13 Nov 2008 14:29:00 GMT)

Mortgage rates drop for second week
AP - Mortgage rates dropped for a second straight week, reflecting the impact the weakening economy is having on financial markets. (Thu, 13 Nov 2008 18:33:57 GMT)

Lenders criticize gov't mortgage aid program
AP - Hundreds of lenders told federal housing officials Thursday that a $300 billion mortgage aid program requires too many losses for consumers and lenders to realistically help 400,000 Americans avoid foreclosure. (Thu, 13 Nov 2008 22:08:26 GMT)

Recession gloom raises stakes for crisis summit
AFP - New US data Thursday showed an alarming drop in trade and Germany officially plunged into recession as gloom deepened ahead of a Washington summit on the worldwide economic crisis. (Thu, 13 Nov 2008 22:49:03 GMT)

Budget deficit hits record; jobless claims surge
AP - The nation's financial picture grew darker Thursday, a day marked by breathtaking numbers: a quarter-trillion-dollar budget deficit for a single month and projections of up to $1 trillion for a year, a half-million new applications for unemployment benefits and a 900-point swing on Wall Street. (Thu, 13 Nov 2008 23:40:25 GMT)

GSE chief says mortgage aid plan should be model
Reuters - U.S. mortgage finance companies should soon adopt a foreclosure prevention plan developed by Fannie Mae and Freddie Mac to ease loan terms for troubled borrowers, the companies' overseer said on Thursday. (Thu, 13 Nov 2008 23:51:00 GMT)

Subprime: Borne of Sleaze, Bribery, and Lies
BusinessWeek Online - It may seem like ancient history now, but not long ago the mortgage industry was turning ordinary people into millionaires. One of them was Sharmen Lane, a high school dropout who, like many other young women during the boom, found her way into an obscure banking job with the clunky title "mortgage wholesaler." Her experience -- and the experiences of other wholesalers like her -- offers a glimpse into the recklessness and indulgence that drove the industry to ruin. (Fri, 14 Nov 2008 13:08:42 GMT)

Damage Control at Insurance Companies
BusinessWeek Online - Individual investors aren't the only ones scared to look at their portfolios. Insurance giants are also watching their holdings wither, a situation that could have serious implications for their customers and the markets. The biggest independent life insurer, MetLife, reported total paper losses of $12.2 billion on its $340 billion portfolio. "You have to plan for things to be depressed for the next few quarters at a minimum," says Steven A. Kandarian, chief investment officer at MetLife. (Fri, 14 Nov 2008 13:08:42 GMT)

Freddie Mac loses $25.3 billion, seeks US infusion
AFP - Freddie Mac, one of the mortgage finance giants taken over by the government earlier this year, reported Friday a quarterly loss of 25.3 billion dollars as it asked for a fresh capital infusion. (Fri, 14 Nov 2008 14:13:49 GMT)

Bush names prosecutor as TARP inspector general
Reuters - President George W. Bush intends to nominate Assistant U.S. Attorney Neil Barofsky to be the special inspector general for the Troubled Assets Relief Program at the Treasury Department, the White House said on Friday. (Fri, 14 Nov 2008 15:16:43 GMT)

FDIC says plan could help 1.5 million keep homes
AP - Publicly breaking with the Bush administration's official stance, the Federal Deposit Insurance Corp. proposed Friday to use $24 billion in government funding to help 1.5 million American households avoid foreclosure. (Fri, 14 Nov 2008 19:09:41 GMT)

Freddie seeks gov't aid after $25.3B loss
AP - Freddie Mac is asking for an initial injection of $13.8 billion in government aid after posting a massive quarterly loss Friday. (Fri, 14 Nov 2008 21:03:22 GMT)

NY prosecutor picked to serve as bailout watchdog
AP - The young prosecutor tapped to monitor the $700 billion financial rescue plan has brought down Colombian drug traffickers, gone after swindling corporate executives and now heads the mortgage fraud unit for the U.S. attorney's office in Manhattan. (Sat, 15 Nov 2008 00:41:10 GMT)

Bulk of top Merrill brokers to join BoA
Reuters - Merrill Lynch & Co said on Friday that the majority of its best-performing financial advisors will join Bank of America Corp when that bank buys Merrill at the end of the year. (Sat, 15 Nov 2008 03:46:30 GMT)

Genworth in deal to buy bank, seeks TARP money
Reuters - Life and mortgage insurer Genworth Financial Inc said on Sunday it applied for capital under a U.S. government program, after reaching a deal to buy a bank, bringing it under federal regulation. (Mon, 17 Nov 2008 06:37:14 GMT)

Postal Service investigates boss's VIP mortgage
AP - The Postal Service is investigating whether the nation's postmaster general improperly received a sweetheart deal on a mortgage from Countrywide Financial Corp., the chairman of the service's governing board said. (Mon, 17 Nov 2008 10:42:26 GMT)

Freddie Mac could lose $20-$40 billion in 2009: Friedman
Reuters - Freddie Mac could post losses totaling $20 billion to $40 billion in 2009, hurt by higher credit costs and write-downs in mortgage assets, an analyst at Friedman Billings Ramsey said. (Mon, 17 Nov 2008 12:25:15 GMT)

Sen. Durbin to seek mortgage bankruptcy change
Reuters - A senior U.S. senator on Monday introduced legislation to let judges alter the terms of distressed mortgages in bankruptcy cases, reviving a controversial proposal meant to help troubled homeowners, a said an aide to the lawmaker. (Mon, 17 Nov 2008 22:29:22 GMT)

Nominee for overseer of bailout faces senators
AP - President George W. Bush's choice to be the federal watchdog over the $700 billion bailout for banks and other financial companies promised Monday to use his experience prosecuting mortgage and securities fraud to keep Congress apprised if the money is being misused. (Mon, 17 Nov 2008 23:17:37 GMT)

Regulator halts Fannie housing fund contributions
Reuters - Fannie Mae , the largest provider of money for U.S. home mortgages, on Tuesday said its federal regulator suspended a mandate to set aside money for a housing trust fund. (Tue, 18 Nov 2008 21:57:58 GMT)

Lawmakers press Paulson on bailout plan changes
AP - Faced with exasperated lawmakers upset by shifts in bailout strategy, Treasury Secretary Henry Paulson launched a spirited defense Tuesday of his handling of the $700 billion program and expressed fresh reservations about tapping the pool for mortgage guarantees to relieve skyrocketing home foreclosures. (Tue, 18 Nov 2008 23:46:58 GMT)

Lawmakers, Treasury lock horns on foreclosures
Reuters - Treasury Secretary Henry Paulson and members of Congress clashed on Tuesday over the best use for the $700-billion financial bailout fund, with lawmakers demanding money to stem a national wave of mortgage foreclosures. (Tue, 18 Nov 2008 23:48:06 GMT)

October housing starts at record low
Reuters - Construction starts on new homes fell to a record low in October, as did new applications for building permits, a report by the Commerce Department showed on Wednesday, signaling that the national housing downturn may extend well into the future. (Wed, 19 Nov 2008 13:48:52 GMT)

Stocks flat as energy gains offset economic woe
Reuters - Stocks were little changed after the open on Wednesday as gains in energy and commodity shares offset diminishing prospects for a U.S. auto industry government rescue in a slumping global economy. (Wed, 19 Nov 2008 14:42:39 GMT)

Mortgage application volume falls 6.2 pct
AP - Mortgage application volume fell 6.2 percent during the week ended Nov. 14, according to the Mortgage Bankers Association's weekly application survey. (Wed, 19 Nov 2008 14:59:27 GMT)

Homebuilder, REIT shares tumble as recession spreads
Reuters - The shares of big U.S. homebuilders and real estate companies alike slumped on Wednesday as housing starts fell to a record low and concerns spread the commercial real estate market is going the way of residential. (Wed, 19 Nov 2008 18:02:20 GMT)

Kashkari: Consumer credit help promising step
Reuters - Actions to support consumer lending could be a productive next step to help repair financial markets, Treasury Department financial rescue package administrator Neel Kashkari said on Wednesday. (Wed, 19 Nov 2008 18:14:37 GMT)

Housing agency loosens foreclosure aid rules
Reuters - The U.S. Department of Housing and Urban Development will loosen terms of its foreclosure-prevention effort so that the program, meant to backstop $300 billion in home loans, can be more effective, the agency said on Wednesday. (Wed, 19 Nov 2008 18:33:19 GMT)

MetLife says commercial mortgage portfolio safe
Reuters - U.S. life insurer MetLife Inc disclosed information about its commercial mortgage portfolio on Wednesday in an effort to soothe investors that have become increasingly skittish about investments by insurers in commercial property debt. (Wed, 19 Nov 2008 23:43:14 GMT)

U.S. probing Golden West lending, sale: prosecutor
Reuters - The government is investigating if homeowners were misled by California bank and mortgage issuer Golden West Financial, which was acquired by Wachovia Corp -- another possible victim. (Thu, 20 Nov 2008 01:30:11 GMT)

Senate to probe bond-ratings firms: report
Reuters - A U.S. Senate subcommittee is opening a probe into causes of the global financial crisis, focusing in part on whether bond-ratings firms, driven by conflicts of interest, boosted mortgage investments which have since collapsed, the Wall Street Journal said. (Thu, 20 Nov 2008 09:55:33 GMT)

October's Drop in Prices and Housing Starts
BusinessWeek Online - The current U.S. downturn continues to generate remarkable moves in economic data. Consider the reports on U.S. consumer prices and housing starts for October, released on Nov. 19: The headline consumer price index (CPI) registered its largest monthly decline in 61 years, while housing starts reached the slowest pace of activity in the history of this data series. (Thu, 20 Nov 2008 13:08:43 GMT)

UK mortgage lending down 44 pct from a year ago
AP - Mortgage lending in Britain was down 44 percent in October compared to a year ago, further evidence the economic downturn is hurting an already weak property market, the Council of Mortgage Lenders said Thursday. (Thu, 20 Nov 2008 14:51:15 GMT)

China fund in talks for stake in AIG unit: report
Reuters - A consortium led by sovereign wealth fund China Investment Corp is in talks to buy a stake of up to 49 percent in American Life Insurance Co, a unit of U.S. insurance company American International Group , the Nikkei financial daily reported. (Thu, 20 Nov 2008 18:40:36 GMT)

Banks, raters face subprime lawsuits and new rules
Reuters - The U.S. subprime mortgage crisis has sparked more than 250 class action suits against Wall Street banks and rating companies and will lead to rising regulation in 2009, top litigators said on Thursday. (Thu, 20 Nov 2008 21:45:05 GMT)

Fannie Mae, Freddie Mac to suspend US home foreclosures
AFP - The two US mortgage finance giants, Fannie Mae and Freddie Mac, said on Thursday they halt home foreclosures until early January as they modify loans to help keep owners in their homes. (Thu, 20 Nov 2008 22:35:51 GMT)

Fannie Mae, Freddie Mac halting foreclosures
AP - Mortgage finance companies Fannie Mae and Freddie Mac are suspending foreclosures for about 16,000 households during the holiday season. (Thu, 20 Nov 2008 23:24:22 GMT)

Fannie Mae, Freddie Mac suspend some foreclosures
Reuters - Fannie Mae and Freddie Mac, the two biggest U.S. home loan finance companies, on Thursday said they would suspend foreclosures of occupied homes until early 2009, as the government moves to stem the tide of home losses plaguing the economy. (Thu, 20 Nov 2008 23:33:13 GMT)

UK home repossessions up 12 pct in 3Q from 2Q
AP - Home repossessions in Britain jumped 12 percent to 11,300 in the third quarter from the previous quarter, the Council of Mortgage Lenders said Friday, more evidence that the financial crisis is taking its toll on households and the ailing housing market. (Fri, 21 Nov 2008 10:49:34 GMT)

FHA-Backed Loans: The New Subprime
BusinessWeek Online - As if they haven't done enough damage. Thousands of subprime mortgage lenders and brokers -- many of them the very sorts of firms that helped create the current financial crisis -- are going strong. Their new strategy: taking advantage of a long-standing federal program designed to encourage homeownership by insuring mortgages for buyers of modest means. (Fri, 21 Nov 2008 13:08:43 GMT)

'Help' Can Be Costly
BusinessWeek Online - The implosion of the subprime mortgage market has been a boon to loan-modification consultants who promise to help borrowers refinance and get back on the road to financial stability. (Fri, 21 Nov 2008 13:08:43 GMT)

Your Life Insurance Policy May Not Be Protected
BusinessWeek Online - With the financial system in crisis, investors increasingly rely on government guarantees to protect their money. Bank accounts are backed by the Federal Deposit Insurance Corp. and its $53 billion war chest. After decades on their own, money market funds now are backed by the U.S. Treasury. And life insurance policies and annuities? They're backed by state guaranty associations. There's only one hitch: The states have virtually no cash on hand and must rely on promises to pay made by healthy life insurers. (Fri, 21 Nov 2008 13:08:43 GMT)

Ask AP: Importance of housing starts, honeybees
AP - American farmers have long worried about the declining population of honeybees, a key crop pollinator. But honeybees originally came from Europe, so can't U.S. farms get by without them — with a little help from good old American bugs whose ancestors were here before Columbus? (Fri, 21 Nov 2008 20:26:57 GMT)

Obama may delay high-income tax-cut repeal: aide
Reuters - President-elect Barack Obama may consider delaying an election promise - to roll back tax cuts on high-income Americans - as part of his economic recovery strategy, a senior aide and an adviser said on Sunday. (Sun, 23 Nov 2008 14:39:59 GMT)

Bernanke says he erred in gauging mortgage fallout
AP - Federal Reserve Chairman Ben Bernanke acknowledges he was wrong in believing that there would be limited fallout to financial markets from risky mortgages that soured after the housing market's collapse. (Sun, 23 Nov 2008 20:30:27 GMT)

Government steps in to save Citi, markets rally
Reuters - The U.S. government agreed to inject $20 billion of new capital into one of the world's biggest banks, Citigroup Inc , to avoid a collapse that could have wrought financial havoc around the globe. (Mon, 24 Nov 2008 12:26:28 GMT)

Reports: UK Treasury to raise income tax, cut VAT
AP - Britain's Treasury head Alistair Darling will Monday announce plans to raise the top rate of income tax and cut the basic sales tax to help Britain weather the economic downturn, according to media reports. (Mon, 24 Nov 2008 12:43:46 GMT)

FHA-Backed Loans: The New Subprime
BusinessWeek Online - As if they haven't done enough damage. Thousands of subprime mortgage lenders and brokers -- many of them the very sorts of firms that helped create the current financial crisis -- are going strong. Their new strategy: taking advantage of a long-standing federal program designed to encourage homeownership by insuring mortgages for buyers of modest means. (Mon, 24 Nov 2008 13:08:43 GMT)

'Help' Can Be Costly
BusinessWeek Online - The implosion of the subprime mortgage market has been a boon to loan-modification consultants who promise to help borrowers refinance and get back on the road to financial stability. (Mon, 24 Nov 2008 13:08:43 GMT)

Your Life Insurance Policy May Not Be Protected
BusinessWeek Online - An earlier version of this story included a subhead that gave the impression that MetLife is in imminent trouble. This is not the case. As of the end of its 2008 third quarter, MetLife had unrealized losses of $17 billion out of a total investment portfolio of $324 billion. On Nov. 5, Moody's Investor Services affirmed MetLife's Aa2 financial-strength rating, its second-highest rating. (Mon, 24 Nov 2008 13:08:43 GMT)

UK PM taxes rich to help fund economic recovery
AP - British Prime Minister Gordon Brown set out plans Monday to raise an income tax rate for the first time in three decades, abandoning a pledge that had carried his Labour Party to power. (Mon, 24 Nov 2008 20:04:18 GMT)

China Life interested in AIG Asia assets: source
Reuters - China Life Insurance Co Ltd (2628.HK)(601628.SS), the world's biggest life insurer by market value, is interested in buying Asian assets of American International Group Inc , a senior China Life executive briefed on the situation said on Monday. (Mon, 24 Nov 2008 21:36:24 GMT)

Bush pardons 14 and commutes 2 prison sentences
AP - President George W. Bush has granted pardons to 14 individuals and commuted the prison sentences of two others convicted of misdeeds ranging from drug offenses to tax evasion, from wildlife violations to bank embezzlement, The Associated Press learned Monday. (Mon, 24 Nov 2008 23:20:15 GMT)

Paulson to unveil facility to boost consumer loans: report
Reuters - U.S. Treasury Secretary Henry Paulson plans to announce on Tuesday the formation of a program to increase the availability of auto loans, student loans and credit cards, the Wall Street Journal reported, citing people familiar with the matter. (Tue, 25 Nov 2008 06:53:31 GMT)

Warner Music Group 4Q profit rises 20 percent
AP - Warner Music Group Corp., whose artists include Linkin Park and Madonna, said Tuesday lower income tax expense and increased digital revenue drove its fiscal fourth-quarter profit up 20 percent to beat Wall Street expectations. (Tue, 25 Nov 2008 12:31:55 GMT)

AP - Fed announces purchases of up to $600 billion in mortgage-backed assets to deal with financial crisis. (Tue, 25 Nov 2008 13:21:16 GMT)

UK mortgage approvals halved from year ago
AP - Mortgage lending in Britain has more than halved over the past year, according to the British Banker's Association — further evidence that the economic downturn is dramatically hurting the country's property market. (Tue, 25 Nov 2008 13:35:38 GMT)

Fed says it will buy mortgage-related assets
AP - The Federal Reserve said Tuesday it will buy up to $600 billion in mortgage-backed assets in another attempt to deal with the financial crisis. (Tue, 25 Nov 2008 13:49:36 GMT)

Fed mortgage plan boosts European stock markets
AP - European stock markets spiked higher Tuesday as Wall Street was expected to post further strong gains after the U.S. Federal Reserve unveiled another raft of financing measures to free up credit markets. (Tue, 25 Nov 2008 14:10:26 GMT)

Oil pares losses, back above $53 after Fed action
Reuters - Oil pared its initial losses on Tuesday to climb back above $53 a barrel, after the U.S. Federal Reserve acted to support mortgage markets and U.S. GDP turned out to be no worse than forecast. (Tue, 25 Nov 2008 14:23:53 GMT)

Government plans new credit, mortgage programs
AP - The government introduced a pair of new programs Tuesday that will provide $800 billion to help unfreeze the market for consumer debt and to make mortgage loans cheaper and more available. (Tue, 25 Nov 2008 14:30:38 GMT)

Fed announces new plan to support mortgages
Reuters - The Federal Reserve, in another massive life-support intervention for the U.S. financial system, on Tuesday announced a $600 billion program to buy mortgage-related debt and securities and a $200 billion facility to support consumer debt securities, (Tue, 25 Nov 2008 14:42:06 GMT)

Stocks rise on plan to aid credit issuers
AP - Wall Street extended its advance to a third day Tuesday after the government announced it is readying a program to aid companies that issue credit cards, make student loans and finance car purchases. (Tue, 25 Nov 2008 14:46:23 GMT)

Fed, Treasury expand aid to credit markets
AFP - The Federal Reserve announced plans Tuesday to pump up to 800 billion dollars into the financial system in purchases of mortgage- and asset-backed securities. (Tue, 25 Nov 2008 14:51:18 GMT)

Angry Citi investors to unveil new court complaint
Reuters - After Citigroup Inc shares tumbled last year on the bank's subprime mortgage woes, angry investors sued for fraud. Now, stockholders are due to file a new version of their lawsuit as their losses have become much more stark. (Tue, 25 Nov 2008 20:57:27 GMT)

Mortgage security rates fall after Fed action
AP - Rates on Fannie Mae and Freddie Mac debt fell Tuesday — a promising sign that homeowners' mortgage rates could decline, too — after the Federal Reserve said it will buy up to $600 billion in mortgage-backed assets. (Tue, 25 Nov 2008 22:12:38 GMT)

Fannie Mae names Johnson chief financial officer
AP - Fannie Mae said Tuesday it named David Johnson to serve as the mortgage giant's chief financial officer and executive vice president, beginning immediately. (Tue, 25 Nov 2008 23:54:57 GMT)

Ex-AIG exec under probe by U.S. prosecutors: report
Reuters - Former American International Group Inc executive Joseph Cassano is under investigation by U.S. prosecutors for possibly misleading auditors and investors about subprime mortgage-related losses, according to a Bloomberg report citing people familiar with the probe. (Wed, 26 Nov 2008 03:43:39 GMT)

Abu Dhabi firms set up new UAE mortgage lender
AP - Five state-run and publicly traded companies in Abu Dhabi are launching a new mortgage provider as the credit crunch threatens to stifle the United Arab Emirates' property boom. (Wed, 26 Nov 2008 12:35:52 GMT)

Credit still crunched even as mortgage rates fall
AP - Mortgage rates sank again Wednesday, but investors are worried that getting a loan will still be a tough feat. (Wed, 26 Nov 2008 22:30:48 GMT)

Mortgage rates dip for fourth straight week
AP - Rates on 30-year mortgages sank for a fourth straight week, falling below 6 percent for the first time since early October, and are heading lower due to the government's massive new effort to aid the U.S. housing market. (Wed, 26 Nov 2008 22:31:34 GMT)

Mortgage rates fall for 2nd day; won't help all
AP - Mortgage rates fell for the second day in a row Wednesday, and could be heading toward levels home buyers and owners haven't seen this year. (Wed, 26 Nov 2008 23:08:26 GMT)

Meltdown far from over, new mortgage crisis looms
AP - Black Friday's retail shoppers hunting for holiday bargains won't be enough to stave off what's likely to become the next economic crisis. Malls from Michigan to Georgia are entering foreclosure, commercial victims of the same events poisoning the housing market. (Fri, 28 Nov 2008 09:45:24 GMT)