mortgage debt

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Judge Bars Citigroup Settlement With Feds

Orders trial over toxic mortgage debt sale

(Newser) - A federal judge has halted Citigroup’s proposed $285 million settlement with regulators, calling it “neither reasonable, nor fair, nor adequate, nor in the public interest.” In New York City, Judge Jed Rakoff has ordered a trial over SEC accusations that Citigroup sold toxic mortgage debt it had... More »

FHA May Soon Need Its First-Ever Bailout

Auditors say agency will need taxpayer funds if home prices keep falling

(Newser) - The US housing market is in such sorry shape that the Federal Housing Administration may soon need an injection of taxpayer funds for the first time since it was created as part of the New Deal 77 years ago. The agency's cash reserves have dropped to $2.7 billion,... More »

Mortgages, Wages Force Many to Delay Retirement

Debt weighing down 60-something Americans: Wall Street Journal

(Newser) - Many Americans are being forced to put off retirement thanks to mountains of debt and lower wages, a feature in today’s Wall Street Journal asserts. Because wages have barely kept up with inflation over the past 35 years, Americans have been borrowing more money and saving less. As of... More »

Don't Let Bankers 'Off the Hook'

Deals with banks for paltry sums won't fix the crisis: Paul Krugman

(Newser) - The mantra of recent US fiscal policy has been "go easy on the bankers," writes Paul Krugman in the New York Times . Trouble is, that attitude neither holds them accountable nor does it put us on the road to recovery. Now, federal officials are calling on states to... More »

One Trend Among GOP Freshmen: Debt

Not the national kind, the personal kind

(Newser) - Republican freshmen in Congress say they're serious about tackling the US debt—but when it comes to their own personal debt, many have what the Washington Post amusingly calls “a more nuanced view.” At least 30 out of 87 had debts of $50,000 or more last... More »

Mortgage Scammers Prey on Strapped Homeowners

So-called rescue firms promise to negotiate lower rates, then take money and run

(Newser) - Mortgage brokers who made a mint during the housing boom setting up homeowners in toxic loans are now profiting from a different sort of shady deal. So-called foreclosure rescue firms are proliferating across the US, taking money upfront and promising to negotiate with homeowners’ banks for better interest rates. Instead,... More »

Commercial Real Estate May Set Off 2nd Crisis

Another mortgage-backed securities market gets into trouble

(Newser) - Just as the economy starts to recover, a second mortgage disaster may be looming. The commercial real estate sector is tanking, with many properties unable to generate enough cash to make mortgage payments. Lo and behold, those commercial mortgages have been sewn into securities—comparable to the packages of home... More »

Obama Housing Rescue Plan Leaves Many Out in Cold

Criteria keep many who need help from refinancing under the plan

(Newser) - A large swath of Americans will see no help under the Obama administration’s housing rescue plan, the New York Times reports. While designed to prevent 3 million to 4 million foreclosures through loan modifications, the plan doesn't cover those whose loans aren’t backed by Fannie Mae or Freddie... More »

States Seek to Restrict Employer Credit Checks

Lawmakers want employers to prove credit reports are necessary

(Newser) - Several states and Obama administration officials are seeking restrictions on employers that unfairly screen out job applicants using credit checks, USA Today reports. Spiking unemployment and mortgage foreclosures brought on by the financial crisis have hurt many, and lawmakers say trustworthy people are being shut out of good jobs. Some... More »

Senate Homeowner Aid Moves Big Step Closer

Citi drops opposition to Senate proposal

(Newser) - A Senate plan to help struggling homeowners keep their houses moved closer to fruition yesterday as Citigroup ended its opposition to the bill, the Wall Street Journal reports. The measure would allow so-called “cramdowns,” in which judges in Chapter 13 bankruptcy cases could set lower principal and interest... More »

Ireland Buys 75% of Troubled Lender in Banks Bailout

Anglo Irish goes into taxpayers' hands after scandal

(Newser) - Ireland became the latest nation to partially nationalize struggling banks last night, buying 75% of the deeply troubled Anglo Irish Bank and bailing out others, reports the Financial Times. The bank, whose shares had already dropped 95% from bad mortgage debts, suffered a further blow last week when its CEO ... More »

Bernanke Plugs More Help for US Homeowners

Fed chief outlines ideas for public, private sector to slow foreclosures

(Newser) - Ben Bernanke says more must be done to halt record US home-foreclosure rates, the New York Times reports. The Federal Reserve chief suggested several options today, including the government buying bad mortgages en masse and refinancing them through a government-insured program, and strengthening a scheme aimed at lowering homeowners’ monthly... More »

'Circle of Pain' Snags Emerging Markets, Too

Krugman: Russia et al. not immune after all to crisis' vicious cycle

(Newser) - Only a few weeks ago, it seemed the main fronts of the financial crisis were the Western banking system and mortgage market. But now the crisis has spread to emerging markets like Russia and Brazil. As Paul Krugman writes in the New York Times, the mantra of “decoupling”—... More »

Hillary: Bailout Must Help Homeowners

Wants federal company to buy bad mortgages, address root causes

(Newser) - As Congress debates the terms of the $700 billion bailout, Hillary Clinton warns in a Wall Street Journal op-ed that "this is not just a financial crisis; it's an economic crisis." For the New York senator, any federal action has to tackle the underlying causes of the turmoil—... More »

Denial Exacerbated Meltdown

Banks, like homeowners, refused to believe how bad things really are

(Newser) - The collapse of Lehman Brothers and the fire sale of Merrill Lynch are stunning developments, Joe Nocera writes in the New York Times, as is the fact Goldman Sachs and Morgan Stanley are the only big investment banks standing. But the turmoil isn’t simply the result of complex trading... More »

Lehman Considers 'Good Bank/Bad Bank' Split

Sheltering troubled mortgage debt expected to bolster confidence

(Newser) - Lehman Brothers is considering splitting itself into two banks, a “bad bank” to house its $30 billion in troubled mortgage and real estate holdings, and a “good bank” to carry on with the help of a new investor or two, the New York Times reports. The move, which... More »

Bank Ads Helped Spin 2nd Mortgages

Home equity loans, once desperate moves, now total $1 trillion

(Newser) - Until recently, borrowing against one's home was considered a desperate measure, but now it's commonplace. Since the 1980s, outstanding home-equity loans—once called second mortgages—have exploded a thousandfold to more than $1 trillion. The New York Times looks at how banks waged a concerted advertising campaign to transform Americans'... More »

Freddie CEO Dismissed Bad Omens for Years

Execs charge Syron was warned of disaster

(Newser) - The CEO of Freddie Mac disregarded several warnings from inside the company that the mortgage giant faced imminent disaster. More than two dozen current and former high-ranking employees told the New York Times that Richard Syron dismissed repeated recommendations from as early as 2004 to limit its exposure to bad... More »

Merrill Panic May Mark Bottom of Stock Market

Once regaled for cavalier confidence, CEO's chief cuts losses

(Newser) - Merrill Lynch CEO John Thain has seen better days, Floyd Norris writes in the New York Times. He's gone from “cockiness to capitulation. Distinction to desperation.” Thain recently unloaded a bundle of his company’s securities for 22 cents on the dollar and raised $8.5 billion from... More »

Lone Star Buys Big at Mortgage Fire Sale

Texas fund grabs $6.7B in Merrill castoffs, is hungry for more

(Newser) - Lone Star Fund is looking to profit from the castoffs of the credit meltdown, buying billions of marked-down assets and betting on just some of them to rebound, reports the Wall Street Journal. The Dallas-based private-equity firm run by John Grayken has closed a deal on $6.7 billion in... More »

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