Personal Finance News Jun 2009

U.S. consumer spending eases, income surges
Reuters - U.S. consumer spending fell in April from March, despite personal income posting the largest increase in 11 months, a government report said on Monday, showing activity in the second quarter getting off to a slow start. (Mon, 01 Jun 2009 12:57:27 GMT)

GMAC bank unit denies paying unfair interest rates
Reuters - Ally Bank, the banking unit of auto and mortgage lender GMAC, on Monday denied competitors' complaints that it is paying excessive interest rates to attract deposits while on a government-funded lifeline. (Mon, 01 Jun 2009 15:28:15 GMT)

US income rise fails to ignite consumer spending
AFP - US personal income posted a surprise jump in April fueled by government stimulus and tax breaks but wary consumers were reluctant to spend in the midst of prolonged recession, new data showed Monday. (Mon, 01 Jun 2009 16:21:01 GMT)

Mortgage delinquencies seen rising through 2009
AP - The rate at which people are falling behind on their mortgage payments went up for the ninth straight quarter in the first three months of 2009, and is expected to keep rising through the end of the year, according to credit reporting agency TransUnion. (Tue, 02 Jun 2009 21:38:35 GMT)

Fannie Mae sells $1 billion bills at lower rates
Reuters - Fannie Mae on Wednesday said it sold $1 billion in bills at lower interest rates compared with sales of the same maturities a week ago. (Wed, 03 Jun 2009 13:52:25 GMT)

Sallie Mae CEO sees loan losses peaking
Reuters - Student lender Sallie Mae expects loan losses to peak in 2009, although charge-offs are likely to stay high, Chief Executive Albert Lord said at a conference on Wednesday. (Wed, 03 Jun 2009 13:56:53 GMT)

U.S. recovery hopes face doubts on jobs, mortgages
Reuters - The United States may have hit a bump on the road to economic recovery, according to data released on Wednesday, with half a million private sector jobs lost in May and mortgage applications falling last week in the face of rising interest rates. (Wed, 03 Jun 2009 15:58:26 GMT)

Sallie Mae CEO sees loan losses peaking in 2009
AP - Sallie Mae CEO Albert Lord said Wednesday he expects loan charge-offs at the student lending company to peak in 2009 and remain high next year. (Wed, 03 Jun 2009 16:41:34 GMT)

Abramoff, gov't disputing $500,000 tax refund
AP - Former lobbyist Jack Abramoff and the Justice Department are disputing a tax refund he recently received worth more than $500,000 and whether it should be used to pay court-ordered restitution or his family's massive debts. (Wed, 03 Jun 2009 23:15:28 GMT)

U.S. bond manager pledges purchases in Fed's TALF
Reuters - Standish Mellon Asset Management LLC, a bond manager overseeing $55 billion, on Thursday said it would launch investments in a federal program to boost consumer and commercial mortgage debt markets. (Thu, 04 Jun 2009 14:33:17 GMT)

Mortgage rates above 5 pct for 1st time in 3 mos
AP - Rates on 30-year home loans surged above 5 percent for the first time in nearly three months this week as investors pushed up rates on long-term government debt, which is closely tied to mortgage rates. (Thu, 04 Jun 2009 17:12:03 GMT)

Ex-Countrywide CEO accused on fraud
AFP - US regulators Thursday filed civil fraud charges against the former chief executive of failed mortgage giant Countrywide Financial, saying he misled investors about the company's risky loans. (Thu, 04 Jun 2009 20:30:24 GMT)

Bond yields rise after better jobless claims data
AP - Bond yields are heading higher again, a troubling trend for potential homebuyers or mortgage holders looking to refinance. (Thu, 04 Jun 2009 21:22:48 GMT)

Summary Box: Mozilo accused of civil fraud
AP - FORMER COUNTRYWIDE CEO CHARGED: The government has accused Angelo Mozilo and two other former executives of the fallen mortgage lender of civil fraud and insider trading. The three dispute the civil charges by the Securities and Exchange Commission. (Thu, 04 Jun 2009 22:30:32 GMT)

Countrywide's Mozilo charged with fraud
Reuters - Angelo Mozilo, who built the largest U.S. mortgage lender, was charged with securities fraud and insider trading on Thursday, making him the most prominent defendant in investigations into the U.S. subprime mortgage crisis and housing bust. (Fri, 05 Jun 2009 02:34:05 GMT)

SEC charges ex-Countrywide CEO Mozilo with fraud
AP - Angelo Mozilo, the man who rode the housing boom to build Countrywide Financial Corp. into a California colossus of high-risk mortgage lending, has been charged with civil fraud and illegal insider trading by federal regulators who accuse him of deceiving shareholders and profiting on confidential information. (Fri, 05 Jun 2009 05:36:43 GMT)

Feds hunt fugitive broker
AP - A former Wall Street broker facing criminal charges linked to the subprime mortgage meltdown has become the target of an international manhunt, federal authorities said Friday. (Fri, 05 Jun 2009 19:10:41 GMT)

Can't refinance? Try your congressman
AP - Can't afford your mortgage payment? If the bank won't take your call, your member of Congress just might. (Fri, 05 Jun 2009 19:13:40 GMT)

Countrywide exec often warned about mortgage risks
Reuters - John P. McMurray made it clear to his Countrywide Financial Corp bosses that they were playing a dangerous game with risk. But they didn't listen. (Sat, 06 Jun 2009 01:57:51 GMT)

ALL BUSINESS: Bond-market rout lifts mortgage cost
AP - The Federal Reserve announced a $1.2 trillion plan three months ago designed to push down mortgage rates and breathe life into the housing market. (Sat, 06 Jun 2009 12:39:53 GMT)

Sunstone prepared to turn over W San Diego to bank
AP - Sunstone Hotel Investors Inc. said Sunday it will default on the June mortgage payment for its swanky W Hotel San Diego property and turn over the 258-room downtown hotel to lenders, after failing to lower interest payments. (Sun, 07 Jun 2009 23:47:07 GMT)

A Housing Recovery: Not So Fast
BusinessWeek Online - Stocks of homebuilders have had an impressive run recently, thanks to a stream of improving macroeconomic data, including home sales and consumer confidence, climbing an average of 38% since March 9. But will the recovery last? Recent gains in long-dated U.S. Treasury yields augur rising mortgage rates, while the likelihood of increasing foreclosures could further bloat the housing supply in the months ahead. (Mon, 08 Jun 2009 12:08:42 GMT)

Massachusetts settles with mortgage lender
AP - A bankrupt California-based subprime mortgage lender has agreed to pay $10 million to settle allegations of unfair practices that contributed to the current spike in Massachusetts home foreclosures. (Tue, 09 Jun 2009 17:36:50 GMT)

NY AG targets mortgage modification firms
AP - New York's attorney general says consumers do not have to pay upfront fees to companies that promise help in staving off home foreclosures. (Tue, 09 Jun 2009 17:40:03 GMT)

Some bright spots emerge in tough job market
AP - Signs of stabilization in the job market are emerging, according to several private surveys, as restaurants, mortgage servicers and health centers step up hiring. (Tue, 09 Jun 2009 19:20:48 GMT)

Countrywide exec warned on loans at Fed '06 meeting
Reuters - The chief risk officer of Countrywide Financial Corp, the poster-child company for the loose U.S. home loans that staggered the world economy, was warning against them even when it put him at odds with his own company -- and with Fed chairman Ben Bernanke. (Tue, 09 Jun 2009 21:47:58 GMT)

The Fed's Mortgage Muddle
BusinessWeek Online - Talk about a negative feedback loop: It looks like investors' expectations for an economic recovery could end up delaying that very scenario. Fear of inflation and concerns over the long-term impact of ballooning government debt have been driving up yields on 10-year U.S. Treasury notes, which reached 3.91% on June 8 before easing back to 3.84% the next day. (Wed, 10 Jun 2009 12:08:43 GMT)

U.S. mortgage demand withers as loan rates spike
Reuters - Spiking U.S. mortgage rates drove down total home loan applications last week as demand for refinancing shriveled to the lowest level since November, the Mortgage Bankers Association said on Wednesday. (Wed, 10 Jun 2009 13:45:36 GMT)

U.S. financial planner accused of $6 million fraud
Reuters - A U.S. money manager who ran a financial planning firm has been arrested on charges of defrauding clients of more than $6 million by stealing from their accounts, authorities said on Wednesday. (Wed, 10 Jun 2009 16:18:11 GMT)

U.S. mortgage rates erase Fed's handiwork
Reuters - Mortgage rates leaped with bond yields in the past week to the highest since November, erasing strides made by a massive government program to help revive U.S. housing. (Thu, 11 Jun 2009 15:40:21 GMT)

Mortgage rates rise again
AP - Rates for 30-year home loans jumped to the highest level in seven months this week, leading to a slowdown in refinancing activity, Freddie Mac said Thursday. (Thu, 11 Jun 2009 15:43:43 GMT)

Sen. Dodd urges consumer finance protection agency
Reuters - U.S. Senate Banking Committee Chairman Christopher Dodd on Thursday called for creation of an independent consumer protection agency as part of wider reforms to the U.S. financial regulatory structure. (Thu, 11 Jun 2009 17:35:08 GMT)

NJ mortgage company president guilty in $139M scam
AP - The former president of a New Jersey mortgage company has pleaded guilty in a $139 million fraud scheme that bankrupted his firm. (Fri, 12 Jun 2009 00:07:06 GMT)

Higher rates, oil prices threaten US recovery
AFP - Rising bond yields are taking a toll on home mortgage and corporate lending rates and together with jumping oil prices are threatening the expected US recovery from prolonged recession. (Sun, 14 Jun 2009 04:59:02 GMT)

Court to determine if bankruptcy hearing needed
AP - The Supreme Court will decide whether student loans can be dismissed through bankruptcy with just a notice to the collector instead of a hearing proving that paying the money back would cause an "undue hardship." (Mon, 15 Jun 2009 16:27:36 GMT)

U.S. home-builder sentiment slips in June
Reuters - U.S. home-builder sentiment slipped in June, a private survey showed on Monday, as higher mortgage rates and an ongoing credit crunch dampened expectations for the sector. (Mon, 15 Jun 2009 17:04:32 GMT)

U.S. homebuilder sentiment lower in June
Reuters - U.S. homebuilder sentiment slipped in June, a private survey showed on Monday, as higher mortgage rates and an ongoing credit crunch damped expectations for the sector. (Mon, 15 Jun 2009 17:25:27 GMT)

U.S. housing starts, permits jump in May
Reuters - New U.S. housing starts and permits rebounded in May from record lows as ground-breaking for multifamily units surged after tumbling the prior month, a government report showed on Tuesday. (Tue, 16 Jun 2009 12:39:25 GMT)

Wall Street loses ground on recovery worry
Reuters - The Dow and the S&P 500 dropped to session lows on Tuesday, while the Nasdaq trimmed gains, as investors worried that the economic recovery's pace might not be as strong as initially hoped. (Tue, 16 Jun 2009 16:06:01 GMT)

U.S. housing starts jump in May, inflation muted
Reuters - New U.S. housing starts and permits surged in May from record lows, while wholesale prices were muted despite higher gasoline prices, indicating the economy was moving closer to the end of a deep recession. (Tue, 16 Jun 2009 16:37:31 GMT)

Obama to set up US consumer protection agency
AFP - President Barack Obama plans to set up a federal consumer financial protection agency to shield Americans from predatory practices from credit card firms, banks and mortgage markets, an official said. (Tue, 16 Jun 2009 18:31:40 GMT)

Treasury provides $3B more for foreclosure program
AP - The government will provide another $3.1 billion to a group of mortgage servicing companies as an incentive to modify loans to combat record levels of foreclosures. (Tue, 16 Jun 2009 21:01:31 GMT)

Republican demands BofA-Countrywide loan emails
Reuters - Bank of America has a Wednesday deadline to disclose any special mortgage terms the bank's Countrywide Financial unit gave to politically influential customers over an eight-year period, a senior Republican said on Tuesday. (Tue, 16 Jun 2009 21:40:17 GMT)

Meltdown 101: Reform plan's impact on consumers
AP - American consumers have fallen victim to one financial scandal after another in the past decade, from accounting fraud at Enron to illegal late trading by mutual funds to the subprime mortgage meltdown. (Tue, 16 Jun 2009 22:56:20 GMT)

Housing Starts: Up is Better Than Down
BusinessWeek Online - A greater number of general contractors have been dusting off work boots and hitching up tool belts. Single-family home starts jumped 7.5% in May, the third consecutive monthly rise, indicating that new home construction might be at -- or close to -- a bottom. (Wed, 17 Jun 2009 12:08:42 GMT)

Rise in rates hammers mortgage applications
Reuters - U.S. mortgage applications fell for a fourth consecutive week, with overall demand plunging to its lowest level in nearly seven months, data from an industry group showed on Wednesday. (Wed, 17 Jun 2009 13:04:25 GMT)

E-Trade plans stock offer, debt exchange
AP - Struggling online brokerage and bank E-Trade Financial Corp. is raising capital and exchanging debt as it tries to climb out from under mounting loan losses tied to souring mortgage investments. (Wed, 17 Jun 2009 14:33:27 GMT)

Deutsche, Morgan tapped for AIA IPO role: sources
Reuters - Bailed out U.S. insurer American International Group has chosen Deutsche Bank (DBKGn.DE) and Morgan Stanley as joint global coordinators for the more than $4 billion IPO of its Asian life insurance unit, banking sources said on Thursday. (Thu, 18 Jun 2009 10:20:40 GMT)

Sallie Mae shares soar on government contract
AP - Shares of Sallie Mae soared in premarket activity Thursday after the Department of Education selected the student lender and three other companies to service parts of $550 billion in outstanding federal student loans and future loans owned by the government. (Thu, 18 Jun 2009 12:44:19 GMT)

Dems work to push banking overhaul quickly
AP - President Barack Obama's plan to transform the Federal Reserve into a super-regulator ran into skepticism Thursday from lawmakers who worry that the central bank is not the best suited to keep an eye on firms deemed so big and influential that their demise could hurt the economy. (Thu, 18 Jun 2009 15:33:01 GMT)

Merced: Ghost Town, USA
BusinessWeek Online - The housing crisis is creating ghost towns of once-bustling communities like Merced. In largely abandoned neighborhoods, paved sidewalks and driveways lead to empty lots strewn with utility coils. Unfinished frames with rotting rafters and rusted hinges sit alongside occupied homes. Roughly 40% of the homes in Merced are considered distressed, meaning owners are behind on their mortgage payments or can't make them at all. The toll is expected to rise, even though California extended its moratorium on foreclosures for another 90 days. (Fri, 19 Jun 2009 12:08:42 GMT)

States' income tax revenue plunges in early 2009
AP - State personal income tax collections dropped 26 percent nationwide through first four months of this year compared with a year ago, putting many states' already-shaky budgets into deeper trouble, a research institute reported. (Fri, 19 Jun 2009 19:46:24 GMT)

Senate confirms Allison as TARP chief
Reuters - The U.S. Senate on Friday confirmed Herb Allison, the former chief executive of mortgage finance company Fannie Mae, as assistant Treasury secretary to oversee the government's $700 billion bank bailout fund. (Fri, 19 Jun 2009 20:11:05 GMT)

Former Fannie Mae head to take over bank bailout
AP - Herbert Allison, the former head of troubled mortgage giant Fannie Mae, has been confirmed to oversee the government's $700 billion bank bailout program. (Sat, 20 Jun 2009 00:19:01 GMT)

'Vanilla' home loans could benefit borrowers
AP - If President Barack Obama gets his way, consumers who take out mortgages would automatically get a "plain vanilla" loan — such as a traditional 30-year fixed-rate mortgage — unless they opted for a riskier variety. (Mon, 22 Jun 2009 11:11:21 GMT)

Merced: Ghost Town, USA
BusinessWeek Online - The housing crisis is creating ghost towns of once-bustling communities like Merced. In largely abandoned neighborhoods, paved sidewalks and driveways lead to empty lots strewn with utility coils. Unfinished frames with rotting rafters and rusted hinges sit alongside occupied homes. Roughly 40% of the homes in Merced are considered distressed, meaning owners are behind on their mortgage payments or can't make them at all. The toll is expected to rise, even though California extended its moratorium on foreclosures for another 90 days. (Mon, 22 Jun 2009 12:08:41 GMT)

Trade group cuts mortgage volume forecast for 2009
AP - A key industry group on Monday slashed its estimate for mortgage volume by 27 percent because of higher interest rates and the slow start to the government's refinance program. (Mon, 22 Jun 2009 20:14:44 GMT)

U.S. mortgage applications climb from 7-month low
Reuters - U.S. mortgage applications climbed last week from a seven-month low, the Mortgage Bankers Association said on Wednesday, adding to emerging signs that the three-year housing market collapse may be abating. (Wed, 24 Jun 2009 11:07:02 GMT)

Fed holds policy steady, sees recession easing
Reuters - The Federal Reserve on Wednesday stuck to its huge program of buying government and mortgage debt, which is designed to keep borrowing costs low and boost recovery, and said it saw signs that the deep U.S. recession was easing. (Wed, 24 Jun 2009 22:52:14 GMT)

AIG to repay $25 billion U.S. debt with unit stakes
Reuters - The federal government has agreed to accept $25 billion of preferred stock in two American International Group Inc businesses as partial repayment of debt, the company said on Thursday. (Thu, 25 Jun 2009 15:45:30 GMT)

Mortgage rates tick up, remain above lows
AP - Rates for 30-year home loans edged up this week, remaining above record lows reached over the spring. (Thu, 25 Jun 2009 18:37:02 GMT)

Fed Holds Rates Steady
BusinessWeek Online - With signs the economy is improving but still fragile, Federal Reserve policymakers held the Fed funds rate steady -- at zero to 0.25% -- on June 24, and maintained its pace of purchases of government debt at mortgage-backed securities. (Fri, 26 Jun 2009 12:15:43 GMT)

Freddie Mac May portfolio shrank annualized 9.9 pct
Reuters - Freddie Mac , the second-largest U.S. home funding company, on Friday said its mortgage investment portfolio shrank by an annualized 9.9 percent rate in May, while delinquencies on loans it guarantees accelerated. (Fri, 26 Jun 2009 13:24:18 GMT)

Thinking of Switching Financial Planners?
BusinessWeek Online - You've got a dirty little secret. During long lunch breaks, or after work when everyone else heads home to their families, you're sneaking out to a secret rendezvous. You know what you're doing is perfectly justified, but you still feel a little bad afterwards. You never thought it would come to this. But here you are -- cheating on your financial planner. (Fri, 26 Jun 2009 13:28:23 GMT)

Consumer spending rebounds, supports recovery view
Reuters - U.S. consumer spending rose last month for the first time since February as government stimulus pushed incomes sharply higher, the Commerce Department said on Friday, supporting the view the economy was close to pulling out of recession. (Fri, 26 Jun 2009 14:23:13 GMT)

AIG's Alico set for Europe restructuring: letter
Reuters - AIG's American Life Insurance Company (Alico) will restructure its western European businesses in order to generate cost savings, according to an internal document obtained by Reuters. (Fri, 26 Jun 2009 15:10:18 GMT)

For modest earners, relief repaying student loans
AP - Repaying a student loan could soon be a little less painful. (Mon, 29 Jun 2009 01:28:30 GMT)

Thinking of Switching Financial Planners?
BusinessWeek Online - You've got a dirty little secret. During long lunch breaks, or after work when everyone else heads home to their families, you're sneaking out to a secret rendezvous. You know what you're doing is perfectly justified, but you still feel a little bad afterwards. You never thought it would come to this. But here you are -- cheating on your financial planner. (Mon, 29 Jun 2009 12:08:57 GMT)

Fed Holds Rates Steady
BusinessWeek Online - With signs the economy is improving but still fragile, Federal Reserve policymakers held the Fed funds rate steady -- at zero to 0.25% -- on June 24, and maintained its pace of purchases of government debt at mortgage-backed securities. (Mon, 29 Jun 2009 12:08:57 GMT)

Thinking of Switching Financial Planners?
BusinessWeek Online - You've got a dirty little secret. During long lunch breaks, or after work when everyone else heads home to their families, you're sneaking out to a secret rendezvous. You know what you're doing is perfectly justified, but you still feel a little bad afterwards. You never thought it would come to this. But here you are -- cheating on your financial planner. (Tue, 30 Jun 2009 12:08:43 GMT)

Fed Holds Rates Steady
BusinessWeek Online - With signs the economy is improving but still fragile, Federal Reserve policymakers held the Fed funds rate steady -- at zero to 0.25% -- on June 24, and maintained its pace of purchases of government debt at mortgage-backed securities. (Tue, 30 Jun 2009 12:08:43 GMT)

Protesters demand mortgage help from loan firms
AP - Protests are planned in more than a dozen cities across the country to demand that a group of mortgage companies who benefited from federal bailout money participate in a government program designed to prevent foreclosures. (Tue, 30 Jun 2009 14:51:57 GMT)

Chase: 138k mortgages modified in past 3 months
AP - Chase said Tuesday it has approved 138,000 trial mortgage modifications for struggling homeowners in the past three months. (Tue, 30 Jun 2009 15:17:34 GMT)

Obama admin. sets wide scope for consumer agency
Reuters - A new U.S. agency would have sweeping powers to write and enforce tough consumer protection rules for banks, mortgage lenders and other financial institutions under proposed legislation the Obama administration sent to Congress on Tuesday. (Tue, 30 Jun 2009 17:06:26 GMT)

Treasury OKs 3 firms for mortgage relief program
AP - The Treasury Department said Tuesday that it has approved three more firms for its mortgage relief program. (Tue, 30 Jun 2009 21:11:41 GMT)

Administration sends Congress consumer legislation
AP - President Barack Obama asked Congress on Tuesday to create a new agency to police the fine print on credit card bills and mortgage documents and determine what fees, penalties and interest rates are fair. (Tue, 30 Jun 2009 23:29:59 GMT)