Personal Finance News Oct 2009

Lawmaker seeks group liability for rating agencies
AP - A key House lawmaker wants to make credit rating agencies — widely criticized for failing to give investors adequate warning of the risks in subprime mortgage securities that triggered the financial crisis — collectively liable for inaccuracies. (Thu, 01 Oct 2009 01:23:45 GMT)

Mortgages rates dip below 5 percent
AP - Rates on 30-year home loans dropped below 5 percent for the first time in four months, but still remained above this year's record low, Freddie Mac said Thursday. (Thu, 01 Oct 2009 17:58:48 GMT)

U.S. Treasury set to finalize home "short sales" plan
Reuters - The U.S. Treasury will soon finalize a plan to expand its incentives for mortgage companies to include "short sales" as a way to stem a rising tide of foreclosures, according to a Treasury spokeswoman. (Fri, 02 Oct 2009 23:13:23 GMT)

IBM to buy Wilshire Credit's operating assets
AP - IBM Corp. says that its mortgage servicing subsidiary signed an agreement with Bank of America Corp. to buy the main operating assets of Wilshire Credit Corp. (Mon, 05 Oct 2009 16:12:26 GMT)

Bank of America pledges halt on card rate hikes
Reuters - Bank of America said it will not raise rates or change terms on consumer credit card accounts ahead of reform legislation slated to go into effect early next year, according to a letter released by a lawmaker on Tuesday. (Tue, 06 Oct 2009 20:27:01 GMT)

Fannie, Freddie plan to aid mortgage banks: report
Reuters - U.S. government-controlled mortgage finance companies Freddie Mac and Fannie Mae are working on a program to help independent mortgage banks get access to short-term credit needed to make home loans, the Wall Street Journal said, citing people familiar with the matter. (Wed, 07 Oct 2009 05:05:33 GMT)

Mortgage applications surge to 4-month high
Reuters - U.S. mortgage applications surged last week to their highest since mid-May as consumers sought to take advantage of the lowest interest rates in months, data from an industry group showed on Wednesday. (Wed, 07 Oct 2009 13:53:27 GMT)

Mortgage rates below 5 percent fuel re-fi boom
AP - Every dollar counts in this economy. (Wed, 07 Oct 2009 22:20:23 GMT)

Obama loan relief plan hits goal early
AP - The Obama administration said Thursday that 500,000 homeowners have had their loans modified under its mortgage relief plan, reaching a goal set over the summer. (Thu, 08 Oct 2009 15:11:53 GMT)

Mortgage rates remain below 5 percent
AP - Average rates for 30-year home loans stayed below 5 percent for the second-straight week, kick-starting refinancing activity, Freddie Mac said Thursday. (Thu, 08 Oct 2009 15:59:58 GMT)

Meltdown 101: What is a short sale of a home?
AP - For a homeowner who needs to sell but has a mortgage balance higher than the property value, one option is something called a "short sale." (Thu, 08 Oct 2009 20:18:12 GMT)

Home-Foreclosure Rescue Is Falling Short, Critics Say
BusinessWeek - The Treasury Dept. is basking in the latest tally of homeowners getting a break through its core foreclosure-prevention program. But its data show the number of new mortgage modifications actually fell in September, and government watchdogs are raising concerns that the program is ill-suited to the problems of the housing market. (Fri, 09 Oct 2009 12:08:41 GMT)

What's Ahead for Financials
BusinessWeek - Financial-services stocks have come roaring back since their collapse last fall. Are the gains sustainable? For insight on smart ways to play such stocks now, Personal Finance editor Lauren Young spoke with Anton Schutz, manager of the top-ranked Burnham Financial Services Fund, which delivered an annualized gain of 14.3% over the past decade. (Fri, 09 Oct 2009 12:08:41 GMT)

Watchdog doubts goals of Obama loan relief plan
AP - The Obama administration's effort to help homeowners avoid foreclosure may not achieve its goal of helping 3 million to 4 million borrowers and may simply delay mortgage defaults for many, a government watchdog group says. (Fri, 09 Oct 2009 14:50:02 GMT)

3 tips to start building a college savings account
AP - A new survey by online brokerage TD Ameritrade says college is the top reasons teens save their money. The results were a pleasant surprise to educators who are focusing on getting personal finance taught in schools. The survey indicated 78 percent of teens say they want to share the cost of college with their parents. (Fri, 09 Oct 2009 19:18:41 GMT)

JPMorgan, others to pay $100M settlement
AP - JPMorgan Chase & Co. and two other investment banks have agreed to pay $100 million to settle a lawsuit over their contribution to investor losses in the collapse of American Business Financial Services Inc., the bankruptcy trustee's lawyer said Friday. (Fri, 09 Oct 2009 22:37:25 GMT)

What's Ahead for Financials
BusinessWeek - Financial-services stocks have come roaring back since their collapse last fall. Are the gains sustainable? For insight on smart ways to play such stocks now, Personal Finance editor Lauren Young spoke with Anton Schutz, manager of the top-ranked Burnham Financial Services Fund, which delivered an annualized gain of 14.3% over the past decade. (Mon, 12 Oct 2009 12:08:41 GMT)

AIG to sell Taiwan insurance unit for $2.15 billion
Reuters - American International Group is to sell its Taiwan life insurance unit for $2.15 billion, marking the largest disposal since a U.S. government bailout saved the insurer from collapse last year. (Tue, 13 Oct 2009 11:32:24 GMT)

MBA: Foreclosures, unemployment to peak next year
AP - Foreclosures will peak by the end of next year and unemployment will climb above 10 percent as the housing market and U.S. economy grapple with the aftermath of the recession, the Mortgage Bankers Association's chief economist said Tuesday. (Wed, 14 Oct 2009 00:21:43 GMT)

AP - Fed minutes: Officials were conflicted over program to drive down mortgage rates, aid housing. (Wed, 14 Oct 2009 18:00:25 GMT)

$6.4M fine in Ohio for illegal practice of law
AP - The Ohio Supreme Court on Wednesday ordered two estate planning companies and their co-owners to pay nearly $6.4 million, the state's largest-ever fine for the fraudulent practice of law. (Wed, 14 Oct 2009 20:55:55 GMT)

Fund managers face trial in mortgage market case
AP - Two former Bear Stearns hedge fund managers went on trial Wednesday in one of the few criminal cases brought against Wall Street executives in connection with the housing market collapse. (Wed, 14 Oct 2009 21:37:05 GMT)

Fed officials were conflicted over revival program
AP - Amid uncertainties about strength of the budding recovery, Federal Reserve policymakers last month were conflicted over whether to expand or cut back a program intended to drive down mortgage rates and prop up the housing market, according to a document released Wednesday. (Thu, 15 Oct 2009 00:30:49 GMT)

Foreclosures fall for second straight month
Reuters - U.S. mortgage foreclosure filings fell for a second straight month in September, but remained near a record high, amid ongoing and sweeping efforts to keep borrowers in their homes, a report released on Thursday showed. (Thu, 15 Oct 2009 13:46:40 GMT)

41 people charged in mortgage fraud in NY
AP - Federal authorities have charged 41 people in a mortgage fraud involving tens of millions of dollars across New York state. (Thu, 15 Oct 2009 14:18:42 GMT)

Ex-Bear Stearns manager did not lie: lawyer
Reuters - Former Bear Stearns hedge fund manager Matthew Tannin, on trial for fraud and charges he lied to investors early in the financial crisis, could not have foreseen problems in the subprime mortgage market in 2007, his lawyer said in opening his defense on Thursday. (Thu, 15 Oct 2009 15:29:39 GMT)

Rates on 30-year loans inch up, to 4.92 percent
AP - Rates for 30-year home loans have inched up, but remained below 5 percent for the third-straight week as government efforts to aid the housing market continued to keep rates low. (Thu, 15 Oct 2009 15:36:46 GMT)

AIG sees $1.4 billion loss on Taiwan unit sale
Reuters - American International Group Inc said on Thursday it expects to recognize a loss of about $1.4 billion on the sale of Nan Shan Life Insurance Co, its life insurance unit in Taiwan. (Thu, 15 Oct 2009 15:53:56 GMT)

INSIDE WASHINGTON: Bank errors mar mortgage relief
AP - Towana Gooch, a single mom who lives with her 10-year old daughter, was on the verge of losing her town house in suburban Maryland after her mortgage lender kicked her out of a government loan modification program. The problem, she says she was notified, was a 7-cent error. (Thu, 15 Oct 2009 17:03:54 GMT)

U.S. charges 41 in suspected mortgage fraud scheme
Reuters - U.S. authorities charged 41 people in a suspected mortgage fraud scheme that cheated lenders out of more than $64 million on more than 100 New York state properties, prosecutors said on Thursday. (Thu, 15 Oct 2009 20:00:14 GMT)

IRS: Retirement contributions same for 2010
AP - The maximum contribution limits for your 401(k) and other retirement plans will stay the same next year, the IRS says. (Thu, 15 Oct 2009 21:16:22 GMT)

Firm: Calif. home sales up 1 percent from August
AP - The number of homes sold in California last month ticked up last month from August, as low mortgage rates and eagerness to cash in on a soon-to-expire tax credit fueled activity in a normally sluggish time for home buying, a tracking firm said Thursday. (Fri, 16 Oct 2009 01:26:07 GMT)

Consumer sentiment falls unexpectedly
Reuters - U.S. consumer sentiment fell unexpectedly this month on persistent worries that the "dismal" state of personal finances would not recover quickly from the worst recession in decades, a report showed on Friday. (Fri, 16 Oct 2009 13:58:40 GMT)

BofA swings to $1 billion loss
Reuters - Bank of America Corp posted a $1 billion third-quarter loss as consumer credit woes eclipsed investment banking earnings, underlining why the bank remains on a government respirator and sending its shares down 4.2 percent. (Fri, 16 Oct 2009 14:44:19 GMT)

BofA, GE results weigh, indexes fall 1 pct
Reuters - U.S. stocks dropped sharply on Friday after quarterly results from General Electric Co and Bank of America Corp showed that an economic recovery may be slow and bumpy, denting a four-day rally fueled by earnings optimism. (Fri, 16 Oct 2009 16:20:02 GMT)

Correction: Clorox executive compensation story
AP - In an Oct. 14 story about Clorox Co.'s executive compensation, The Associated Press reported erroneously that CEO Don Knauss received more than $1 million under the company's mortgage subsidy program over three fiscal years. The amount was slightly less than $1 million and reflected total relocation-related benefits, which included the mortgage subsidy program. (Fri, 16 Oct 2009 20:46:51 GMT)

Audit questions FHA's ability to screen lenders
AP - The government's mortgage insurance agency is doing a poor job of screening lenders that enter the program, an internal audit has found. (Fri, 16 Oct 2009 20:56:29 GMT)

UK to tighten mortgage rules, ban "liar loans"
Reuters - Britain's financial regulator plans to force mortgage lenders to check the income of all borrowers, scrapping so-called "liar loans" blamed for helping to fuel bad debt problems at the heart of the credit crunch. (Mon, 19 Oct 2009 10:12:08 GMT)

AP - Administration unveils new effort to provide mortgage help for thousands of homeowners. (Mon, 19 Oct 2009 16:49:25 GMT)

Government unveils new mortgage help
AP - The Obama administration is unveiling a new program to provide support to state and local housing agencies to provide help to thousands of home buyers and renters. (Mon, 19 Oct 2009 17:06:21 GMT)

GE, Lumber Liquidator in consumer finance accord
AP - GE Money, the consumer lending unit of General Electric Co., and Lumber Liquidators, a hardwood flooring retailer, announced Monday a multiyear consumer financing agreement. (Mon, 19 Oct 2009 19:36:03 GMT)

Ahead of the Bell: Housing Starts
AP - Construction of new homes likely posted a modest gain in September although the recovery for the troubled housing sector remains bumpy. (Tue, 20 Oct 2009 10:34:43 GMT)

Housing starts up, permits fall in September
Reuters - New construction of U.S. homes rose by less than expected in September, held back by a plunge in ground-breaking activity for multi-family homes even as single family dwellings rebounded, according to a government report on Tuesday. (Tue, 20 Oct 2009 12:41:32 GMT)

US home building shows new weakness
AFP - US housing starts grew in September but the pace was softer than anticipated while permits for construction fell sharply, government data showed Tuesday, underscoring ongoing woes in the ailing sector. (Tue, 20 Oct 2009 13:16:49 GMT)

Fewer home-building permits signal weakness ahead
AP - Applications for home building permits, a gauge of future construction, fell in September by the largest amount in five months — a discouraging sign for the housing industry. (Tue, 20 Oct 2009 15:20:23 GMT)

Housing, price data points to sluggish recovery
Reuters - Softer-than-expected U.S. housing starts last month and a drop in prices paid at the farm and factory gate pointed to an anemic economic recovery, backing views that interest rates could stay low for a while. (Tue, 20 Oct 2009 15:31:18 GMT)

Wall Street sinks as housing data offsets earnings
Reuters - U.S. stocks dropped on Tuesday, as disappointing data on the housing market outweighed strong earnings from bellwethers Apple and Caterpillar. (Tue, 20 Oct 2009 17:07:22 GMT)

Stocks drop after mixed economic data, earnings
AP - A weak report on housing starts made investors nervous that the economy will be slower to recover even as profits at many companies exceed expectations. (Tue, 20 Oct 2009 17:19:53 GMT)

Meltdown 101: Housing starts show industry's woes
AP - Housing construction is crawling out of its very deep hole, but no one expects it to reach the heights hit before the housing bubble burst — at least not for a very long time. (Tue, 20 Oct 2009 20:55:12 GMT)

How the major stock indexes fared on Tuesday
AP - A disappointing report on housing starts made investors nervous about the economy Tuesday and sent stocks lower even as profits at many companies exceed expectations. Stocks retreated from 2009 highs after the Commerce Department said applications for home building permits fell in September by the largest amount in five months. That is a discouraging signal for future construction. (Tue, 20 Oct 2009 21:41:02 GMT)

Earnings roundup: Sallie Mae, Cymer
AP - Among the earnings stories for Tuesday, Oct. 20, from AP Financial News: (Tue, 20 Oct 2009 21:57:05 GMT)

Sallie Mae posts profit as credit market improves
AP - The student lender best known as Sallie Mae posted a third-quarter profit that beat Wall Street expectations as credit markets improved and student loan activity increased. (Tue, 20 Oct 2009 22:59:02 GMT)

Housing, price data points to sluggish recovery
Reuters - Softer-than-expected U.S. housing starts last month and a drop in prices paid at the farm and factory gate pointed to an anemic economic recovery, backing views that interest rates could stay low for a while. (Wed, 21 Oct 2009 00:36:28 GMT)

Wells Fargo profit jumps
Reuters - Wells Fargo & Co said shareholder profit rose 60 percent in the third quarter as mortgage banking revenue surged. (Wed, 21 Oct 2009 12:17:25 GMT)

Morgan Stanley gives world stocks a lift
AP - European and U.S. stock markets rose modestly Wednesday after solid earnings from U.S. bank Morgan Stanley. The euro, meanwhile, broke above $1.50 for the first time in over a year as the dollar extended its retreat. (Wed, 21 Oct 2009 16:21:28 GMT)

Wells Fargo profit jumps to record $3.2 bln
AFP - Wells Fargo said Wednesday its third-quarter earnings rose to a record 3.2 billion dollars, as the banking giant managed to profit from mortgages and consumer credit despite a weak economy. (Wed, 21 Oct 2009 16:28:29 GMT)

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Ohio House speeds tax-cut delay; Senate to slow it
AP - The Ohio House is moving quickly toward approving a delay in planned income tax reductions, but the Senate plans to slow it down, study alternatives and possibly propose something else to fill a budget hole. (Wed, 21 Oct 2009 16:43:26 GMT)

Rates on 30-year loans inch up to 5 percent
AP - Rates for 30-year home loans have inched up, hitting 5 percent for the first time in nearly a month after bond yields edged up. (Thu, 22 Oct 2009 16:17:52 GMT)

The Right Insurance Policy for You
The Motley Fool - If you are single, or one-half of a two-income, no-dependents household, you probably won't need much life insurance, if any. With a little planning, you can establish a low-risk savings fund to cover funeral costs, and invest the money you would have paid for insurance premiums. (Thu, 22 Oct 2009 17:49:36 GMT)

IberiaBank opens new mortgage offices in Ala., Ga.
AP - IberiaBank Corp. has opened three new mortgage offices in Alabama and two in Georgia. (Fri, 23 Oct 2009 17:23:46 GMT)

House panel's probe targets big mortgage lenders
AP - A House panel is investigating the role of mortgage lenders in the financial crisis and is seeking information from some of the biggest U.S. companies to determine if they used deceptive practices to lure borrowers into the housing boom. (Fri, 23 Oct 2009 20:02:10 GMT)

Barclays bank to buy Standard Life assets
AFP - British bank Barclays announced on Monday that it will buy the home loans and savings division of insurer Standard Life for 226 million pounds (246 million euros, 369 million dollars). (Mon, 26 Oct 2009 13:48:46 GMT)

Barclays snaps up Standard Life Bank for £226 mln
AFP - Barclays on Monday bought the home loans and savings arm of insurer Standard Life, pursuing its expansion strategy after the part-purchase of failed US titan Lehman Brothers last year. (Mon, 26 Oct 2009 15:06:37 GMT)

Barclays snaps up Standard Life Bank division
AFP - British bank Barclays on Monday bought the home loans and savings arm of insurer Standard Life, pursuing its expansion strategy after the part-purchase of failed US titan Lehman Brothers last year. (Mon, 26 Oct 2009 15:38:31 GMT)

PHH Corp. names chief executive officer
AP - Mortgage originator PHH Corp. said Monday that it named Jerome J. Selitto as president and CEO and a director, effective immediately. (Mon, 26 Oct 2009 23:29:09 GMT)

U.S. judge appoints trustee to run Thornburg Mortgage
Reuters - A bankruptcy judge appointed a trustee to take over the liquidation of Thornburg Mortgage after it was discovered former executives were using staff and equipment to launch a start-up venture. (Tue, 27 Oct 2009 01:08:02 GMT)

Silver State Helicopters student debt case settled
AP - Attorneys general say a student loan company has agreed to forgive almost $113 million in debts for students of a Nevada-based helicopter flight school that went bankrupt in 2008. (Tue, 27 Oct 2009 21:26:34 GMT)

Half of workers changing jobs cash out 401k
AP - Millions of workers take a huge chance with their retirement savings every year: They cash out their 401(k) accounts when they lose their jobs or move to new employers. (Wed, 28 Oct 2009 22:16:10 GMT)

UK mortgage approvals up 6 pct in September
AP - Mortgage approvals in the U.K. rose 6 percent in September as the country's battered housing market improved, but cautious consumers paid off debt faster than they borrowed, the Bank of England said Thursday. (Thu, 29 Oct 2009 10:18:23 GMT)

Rates on 30-year loans rise to 5.03 percent
AP - Rates for 30-year home loans climbed to 5.03 percent this week, the third consecutive weekly increase. (Thu, 29 Oct 2009 17:36:26 GMT)

U.S. consumer sentiment dips in Oct: survey
Reuters - U.S. consumer sentiment slipped this month as Americans fretted about personal finances and focused on paying down debt, a survey showed on Friday. (Fri, 30 Oct 2009 14:46:46 GMT)

Md. man sentenced to prison for mortgage fraud
AP - An Oxon Hill man has been sentenced to more than three years in prison for a mortgage fraud tied to 25 properties in Maryland, D.C. and Virginia worth millions of dollars. (Fri, 30 Oct 2009 18:47:19 GMT)

Feds taking action against reverse mortgage lender
AP - The U.S. Department of Housing and Urban Development is taking action against a reverse mortgage lender in Hawaii. (Fri, 30 Oct 2009 19:10:05 GMT)