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Personal Finance News 06/2008



B&B warns on UK mortgage market as TPG buys in (Reuters)
Reuters - Bradford & Bingley issued a stark warning on the state of the UK mortgage market on Monday and slashed the price of its emergency fundraising to secure a private equity lifeline, hitting bank shares across Europe.

Wachovia ousts CEO Thompson after losses mount (Reuters)
Reuters - Wachovia Corp said on Monday it ousted Ken Thompson as chief executive of the fourth-largest U.S. bank, in the wake of mounting legal and regulatory troubles and an ill-fated purchase of a big mortgage lender as the nation's housing boom was about to go bust.

Stocks fall as ISM signals inflation (Reuters)
Reuters - Stocks remained lower on Monday after a May reading for the Institute for Supply Management's index on manufacturing activity showed smaller-than-expected contraction but showed growing inflationary pressures.

WaMu strips CEO Killinger of chairman role (Reuters)
Reuters - Washington Mutual Inc , a nationwide bank and home lender slammed by the mortgage slump, said on Monday that it would strip Chief Executive Kerry Killinger of his title of chairman next month.

Bank downgrades, Wachovia ouster rocks markets (Reuters)
Reuters - Downgrades of three U.S. investment banks, an ouster of Wachovia's chief executive, and a bleak U.K. housing market outlook from a British mortgage lender shook markets on Monday, reigniting fears that the global credit crunch will continue to hurt the world economy.

Bank of America CEO: Countrywide remains good deal (AP)
AP - Bank of America CEO Ken Lewis says buying mortgage company Countrywide is still a good deal even though the housing market continues to falter.

US bank Wachovia ousts CEO after losses (AFP)
AFP - Wachovia, one of America's biggest banks, said Monday that its chief executive Ken Thompson is leaving the bank as its board of directors seeks to stem hefty losses tied to troubled mortgage loans.

Wachovia board forces out CEO Ken Thompson (AP)
AP - Less than a month after losing his chairman post, and more than two years after an ill-timed acquisition of California mortgage lender Golden West Financial Corp., Wachovia Corp. said Monday that board members have forced CEO Ken Thompson to retire from the nation's fourth-largest bank.

Washington Mutual replaces Killinger as chairman (AP)
AP - Washington Mutual Corp., hard-hit by the mortgage and credit crises, said Monday it will replace Chief Executive Kerry Killinger as chairman of the board and take other steps to improve corporate governance.

ResCap says needs more liquidity (AP)
AP - Residential Capital LLC, the mortgage lending unit of GMAC LLC, said Tuesday it needs more than three times more cash to stay in business than it estimated just weeks ago.

Mass. sues H&R Block over mortgages to minorities (Reuters)
Reuters - Massachusetts authorities sued H&R Block Inc on Tuesday, charging that its mortgage unit discriminated against black and Latino borrowers and escalated a crisis over property foreclosures in the state.

S&P agrees to change some business practices (AP)
AP - Standard & Poor's said Tuesday it has tentatively settled with New York Attorney General Andrew Cuomo to overhaul some of its business practices in the aftermath of the subprime mortgage crisis.

Mortgage applications index hits 6-year low: MBA (Reuters)
Reuters - U.S. mortgage applications fell for a third consecutive week, reaching its lowest level in over six years as demand for home refinancing loans plunged, an industry group said on Wednesday.

Credit recession may last over 2 years: strategists (Reuters)
Reuters - A "credit recession" sparked by a downturn in the U.S. housing market and excesses in structured finance may last more than two years, and the financial sector may undergo "massive consolidation," according to two leading Wall Street strategists.

British house prices slump in May (AFP)
AFP - British house prices tumbled 3.8 percent in May for the largest annual drop since April 1993, home loans provider Halifax said on Thursday.

Home foreclosures set record in first quarter (AP)
AP - Home foreclosures and late payments set records over the first three months of the year and are expected to keep rising, stark signs of the housing crisis' mounting damage to homeowners and the economy.

Big 3 credit rating firms agree to reform practices (AFP)
AFP - The big three credit rating agencies have agreed to reform their practices relating to complex mortgage-backed securities, New York attorney general Andrew Cuomo announced Thursday.

New York sets rating agency fee reforms (Reuters)
Reuters - The three top credit rating agencies struck a pact with New York's attorney general on Thursday to change the way they charge fees for reviewing mortgage-backed securities, the latest development in a probe into the U.S. home loan industry.

Bank of America wins approval to buy Countrywide (AP)
AP - The Federal Reserve on Thursday approved Bank of America Corp.'s purchase of distressed subprime mortgage lender Countrywide Financial Corp.

Bank of America wins approval to buy Countrywide (AP)
AP - The Federal Reserve has approved Bank of America Corp.'s purchase of distressed mortgage lender Countrywide Financial Corp.

AIG faces SEC probe on subprime mortgage contracts: report (Reuters)
Reuters - The U.S. Securities and Exchange Commission is investigating whether American International Group Inc overstated the value of contracts linked to subprime mortgages, the Wall Street Journal said on Friday, citing people familiar with the matter.

Japan financials' subprime losses $8 bln: regulator (Reuters)
Reuters - Losses from investments tied to the U.S. subprime-mortgage market cost Japanese financial firms about $8 billion as of the end of March, Japan's financial regulator said on Friday, up 42 percent from December.

Fed's Kroszner: Parts of mortgage market stalled (Reuters)
Reuters - Strains in financial markets have eased somewhat but securitizations of non-agency mortgage products remain stalled and will recover only gradually, Federal Reserve Governor Randall Kroszner said on Friday.

AIG faces probe on mortgage contracts: report (Reuters)
Reuters - U.S. securities regulators are investigating whether American International Group Inc overstated the value of contracts linked to subprime mortgages, the Wall Street Journal reported on Friday.

Freddie Mac CEO tries to reassure battered shareholders (AP)
AP - Freddie Mac's chief executive tried to reassure shareholders Friday that the mortgage finance company's fortunes will improve, after a year in which its share price was sliced by more than 60 percent amid a prolonged housing slump.

FiLife venture opens personal finance site (Reuters)
Reuters - FiLife, a personal finance venture from IAC/InterActiveCorp and Dow Jones & Co, will open its site to a public test on Wednesday after a year in development and much media speculation over its future.

Mortgage applications rise in latest week: MBA (Reuters)
Reuters - Mortgage applications rose after falling for three straight weeks, bouncing back from the lowest level in more than six years and overcoming a rise in home loan rates, an industry trade group said on Wednesday.

Bank of America CEO committed to Countrywide (Reuters)
Reuters - Bank of America Corp Chief Executive Kenneth Lewis said Wednesday he remains committed to buying Countrywide Financial Corp , the giant money-losing mortgage lender, but acknowledged that the nearly year-long global credit crisis still has "a ways to go."

Obama vice presidential search chief quits (Reuters)
Reuters - Democratic presidential candidate Barack Obama on Wednesday said the head of his vice presidential search team and former head of the mortgage giant Fannie Mae had decided to step aside.

Banks giving short-term help to mortgagors (Reuters)
Reuters - The biggest U.S. banks that service more than 23 million mortgages totaling $3.8 trillion have focused on short term relief for troubled borrowers rather than permanent changes to mortgage conditions to prevent foreclosures, a top U.S. banking regulator said on Wednesday.

AIG shareholders demand board changes (Reuters)
Reuters - Shareholders of American International Group Inc are demanding changes to the management and board of the world's largest insurer, which has been struggling with the fallout of the subprime mortgage mess.

Thornburg Mortgage posts $3.31 billion loss (Reuters)
Reuters - Thornburg Mortgage Inc , a specialist in jumbo home loans that nearly went bankrupt in March, on Thursday posted a $3.31 billion first-quarter loss as the value of mortgages and other securities it owns plummeted.

Thornburg Mortgage swings to $3.31 billion 1Q loss (AP)
AP - Thornburg Mortgage Inc. said Thursday it swung to a $3.31 billion loss in the first quarter, and expects loan delinquencies to continue to increase "modestly" for the rest of the year.

Are You Paying Your Pro the Wrong Way? (The Motley Fool)
The Motley Fool - When you're hiring a financial planner, it pays to screen carefully. For one thing, you need to understand exactly how planner candidates are paid, so that you can make an informed market decision. But remember -- not many worthwhile pros work for peanuts. You don't want to get so ruthless about cost that you end up with worthless advice.

Inflation fear sends mortgage rates to 8 month high (Reuters)
Reuters - U.S. fixed mortgage rates surged to their highest in almost eight months after central bankers jolted financial markets with concerns of accelerating inflation.

Installment Sales: The Time Is Ripe (BusinessWeek Online)
BusinessWeek Online - It's a nice problem to have: enough money that you need to think about lessening estate taxes for heirs. And this is a good time to start estate planning, since the interest rates the government sets for one strategy, called installment sales, make it particularly attractive right now.

US foreclosure filings surge 48 percent in May (AP)
AP - Soaring foreclosures are continuing to raise questions about the mortgage industry's claims that they are making a dent in the housing crisis.

Appeals court denies Texaco's tax refund request (AP)
AP - A federal appeals court has denied Texaco Inc.'s bid for a $101 million tax refund after paying $1.25 billion to settle an overcharging complaint.

Wachovia shares fall to lowest since 1992 (Reuters)
Reuters - Wachovia Corp shares fell as much as 10.2 percent to their lowest level since 1992 on concern the fourth-largest U.S. bank might cut its dividend a second time, and after another mortgage lender with heavy exposure to California reported a jump in nonperforming assets.

U.S. senator: No Countrywide VIP treatment received (Reuters)
Reuters - The chairman of the powerful Senate Banking Committee on Friday denied a media report that he received preferential mortgage terms from Countrywide Financial Corp, a key player in the U.S. housing crisis.

Countrywide gave special treatment to US lawmakers: reports (AFP)
AFP - Countrywide Financial, the largest mortgage lender at the center of the US housing crisis, regularly gave loans on favorable terms to prominent lawmakers and former cabinet members, according to US media.

Reports: AIG board names Willumstad as new CEO (AP)
AP - American International Group Inc., which has lost billions on bad bets on the mortgage market, on Sunday named former Citigroup Inc. executive Robert Willumstad to replace the insurer's chief executive, The Wall Street Journal reported.

A list of CEOs deposed during the credit crisis (AP)
AP - Some call them victims of the credit crisis, others call them the perpetrators. Here's a list of CEOs in the financial services industry who have been ousted over the past year in the wake of the mortgage market meltdown.

AIG board names Willumstad as new CEO (AP)
AP - American International Group Inc., which has lost billions on bad bets on the mortgage market, on Sunday named former Citigroup Inc. executive Robert Willumstad to replace the insurer's besieged chief executive.

AIG replaces CEO Sullivan amid subprime woes (Reuters)
Reuters - The world's biggest insurer, American International Group Inc , replaced CEO Martin Sullivan on Sunday after it suffered two quarters of record losses from risky mortgage bets and its share price more than halved over the past year.

Lenders pledge speedy response on loan help (AP)
AP - Mortgage companies, facing criticism that they aren't doing enough to stem the housing crisis, are pledging to let troubled borrowers know whether they're approved for help within 45 days of receiving a homeowner's application.

Goldman close to $7 bln SIV restructure: sources (Reuters)
Reuters - Goldman Sachs Group Inc has nearly completed a long-awaited rescue of a $7 billion structured investment vehicle, sources said, just as it adjusts to the credit crunch by laying off hundreds of bankers.

Core producer prices slow, housing starts dip (Reuters)
Reuters - Producer prices rose by a larger-than-expected 1.4 percent in May after another jump in energy prices, but core inflation at the producer level moderated as forecast, government data on Tuesday showed.

Housing starts in May hit 1991 low (Reuters)
Reuters - U.S. housing starts slid 3.3 percent in May to their lowest level in more than 17 years, while permits for future construction also fell, signaling more weakness ahead for the battered U.S. housing sector.

US May housing starts fall to 17-year low (AFP)
AFP - US housing starts slid 3.3 percent in May to the slowest pace in 17 years amid a prolonged slump in the real-estate sector, government data showed Tuesday.



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