Bush camp opposes using bailout funds
Washington Post Nov 14, 08 8:42 AM CST
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Officials at the FDIC are butting heads with the Bush administration over the bailout once again, yesterday outlining a plan to prevent 1.5 million foreclosures in the coming year by having banks sharply reduce monthly payments on mortgages, the Washington Post reports. The government would guarantee half the losses should the banks lose money on modified loans, costing an estimated $24.4 billion to the government.
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Systematic reworking faces typical hurdles
Wall Street Journal Nov 1, 08 6:48 AM CDT
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The first large-scale experiment in how to keep struggling borrowers in their homes is being run by the FDIC at seized mortgage lender IndyMac, the Wall Street Journal reports, and the results are mixed. Of some 65,000 borrowers with “seriously delinquent” mortgages, about 47,000 qualify for aid through loan modifications, and the average renegotiation has cut homeowners’ payments by some $380, or 23%.
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Treasury, FDIC working on measure to help avoid more foreclosures
Washington Post Oct 29, 08 4:36 PM CDT
(Newser)
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The Treasury Department and the FDIC are working on a plan to guarantee the mortgages of 3 million struggling homeowners, the Washington Post reports. Under the plan, lenders would reduce monthly payments so owners could avoid foreclosure. If the homeowners defaulted anyway on the reconfigured loan, the government would repay the lender a portion of the loss.
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Feds hunt author of threats to bank CEO
ABC News Oct 23, 08 6:50 AM CDT
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A flurry of letters threatening the life of JPMorgan CEO Jamie Dimon, as well as an Oklahoma City-style bombing of a bank facility, are being investigated by the Postal Investigation Service. ABC News reports a $100,000 reward has been posted for information about the 45-plus letters, all postmarked last week in Amarillo, Texas.
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Plan would give banks an incentive to rework troubled mortgages
Wall Street Journal Oct 23, 08 6:33 AM CDT
(Newser)
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Homeowners struggling to pay their mortgages would get help from the federal government under a $40 billion plan FDIC Chair Sheila Bair is expected to unveil today, reports the Wall Street Journal . Bair’s initiative, which would offer banks financial incentives to rework troubled mortgages into more affordable ones, is one of several ideas gaining traction in Washington to attack the epidemic of foreclosures that triggered the financial crisis.
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Regulator clashes with Paulson, Bernanke over relief for lenders
Wall Street Journal Oct 16, 08 9:25 AM CDT
(Newser)
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The FDIC chief is blasting the White House and Congress for focusing the $700 billion bailout on financial institutions and not giving homeowners facing foreclosure more help, reports the Wall Street Journal. Sheila Bair, a Bush appointee, says the government’s insistence that homeowners not profit from its help—while appearing unconcerned about institutional profiteering—has been “a frustration.”
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Associated Press Oct 14, 08 12:18 PM CDT
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Republican John McCain says he would order the Treasury Department to guarantee 100% of all savings for the next 6 months as president. That provision is part of a $52.5 billion plan the presidential candidate laid out to address the nation's deepening financial crisis. "The moment requires that government act," McCain told a suburban Philadelphia audience. "And as president I intend to act, quickly and decisively."
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$250B bailout needed to restore faith, keep capital at home
New York Times Oct 14, 08 1:00 AM CDT
(Newser)
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The $250 billion plan to guarantee new bank debt and unlimited bank deposits in certain accounts isn’t just an option, Treasury Secretary Paulson told the chiefs of nine banks yesterday; it’s for the good of the country. The plan, the country’s response to similar European banking actions, is engineered to quash feats that US banks will default and keep capital from flowing overseas to safer banks, the New York Times reports.
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Bank says new buyout violates an exclusivity agreement
Bloomberg Oct 3, 08 11:43 AM CDT
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Citigroup is seeking to nullify the Wells Fargo takeover of Wachovia announced this morning, Bloomberg reports. Citi claims the $15.4 billion deal violates an exclusivity agreement it had worked out with Wachovia early this week. "Citi has substantial legal rights regarding Wachovia and this transaction,'' the bank said in a statement.
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ANALYSIS
Agency lacks funds to insure present level, much less proposed raise to $250K
The Big Money Oct 2, 08 1:49 PM CDT
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The Federal Deposit Insurance Corporation has quietly and effectively done its job safeguarding Americans’ money since 1933, but the financial crisis will thrust the agency into the spotlight, reports Big Money, Slate’s financial offshoot. The bailout bill increases the amount the FDIC insures, from $100,000 to $250,000, but it appears the agency doesn’t have the cash to make good on its promises.
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New bill will cost even more
Chicago Tribune Oct 2, 08 9:22 AM CDT
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By resoundingly passing its version of the bailout bill, the Senate has ratcheted up the pressure on House leaders to go along with the plan, the Swamp reports. “We’re going to fix the problem this week,” promised Mitch McConnell. The new bill more than doubles the FDIC insurance cap and eliminates the Alternative Minimum Tax, provisions expected to be a hit with House Republicans.
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OPINION
Higher deposit insurance would bring money in, help thaw credit markets
BusinessWeek Oct 1, 08 10:17 AM CDT
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Congress should stop fighting over the Paulson bailout, writes BusinessWeek economist Michael Mandel, and approve an expansion of FDIC deposit insurance to $1 million. It should also triple deposit insurance reserves to $145 billion. It would solve the immediate problem, calming the hysteria in the market, and attract funds to banks, he argues, and give Congress time to decide whether banks, and the housing market, still need federal support.
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Help for George Baileys could win over balky politicians
Wall Street Journal Oct 1, 08 2:13 AM CDT
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A plan to boost deposit insurance for bank accounts is gaining traction in Washingto