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Personal Finance News 07/2008



CIT Group exits home lending businesses (AP)
AP - CIT Group Inc. said Tuesday it will sell its home lending business to Lone Star Funds for $1.5 billion in cash, plus $4.4 billion of assumed debt, in a move to exit the troubled mortgage arena and focus on its commercial finance operations.

Real Estate: Making the REIT Picks (BusinessWeek Online)
BusinessWeek Online - After a great run, real estate investments have suffered over the past year, with the average real estate mutual fund down 18%, according to Morningstar. David Lee has managed the $2.5 billion T. Rowe Price Real Estate Fund (NASDAQ:TRREX - News) since it opened in October 1997, so he has seen tough times before. In the two years after the fund started, shares of real estate investment trusts (REITs) lost almost 20%, even as the Standard & Poor's 500-stock index raced ahead 50%. "Even my family was calling up saying they were going to disown me," Lee jokes.

CIT shares jump on deal to shed mortgage assets (Reuters)
Reuters - CIT Group Inc said on Tuesday it agreed to sell nearly $10 billion of mortgage assets, in a deal that removes problem loans from the commercial lender's balance sheet and lifted its shares 14 percent in premarket trading.

Bank of America completes acquisition of Countrywide (AFP)
AFP - Bank of America said Tuesday it completed its purchase of Countrywide Financial, the largest US mortgage lender that had been at the center of the country's subprime loan crisis.

Gov. pushing plan to help struggling NC homeowners (AP)
AP - Gov. Mike Easley called on state lawmakers Tuesday to make up for the federal government's inaction by approving a measure to help some struggling North Carolina homeowners by giving them more latitude to repay their debt.

BofA completes deal for Countrywide Financial (AP)
AP - Bank of America Corp. completed its purchase of Countrywide Financial Corp. Tuesday, making the Charlotte-based bank the nation's leading mortgage originator and servicer.

Housing market seen getting worse (Reuters)
Reuters - An even gloomier scenario may be in store for an already ailing U.S. housing market if the overall economy slips into a recession, according to UBS Securities analysts.

Rates on 30-year mortgages drop to 6.35 percent (AP)
AP - Rates on 30-year mortgages, which had been rising for five straight weeks, posted a decline this week as signals from the Federal Reserve eased worries about imminent rate increases.

TPG pulls out of Bradford & Bingley plan (AP)
AP - Bradford & Bingley PLC said Friday it is revising its plans to raise new capital after U.S. private equity fund Texas Pacific Group pulled out of its agreement to invest more than $350 million in the mortgage banker.

Employers use federal law to deny benefits (AP)
AP - Dying of cancer, Thomas Amschwand did everything he was told to make sure his wife would collect on the life insurance policy he had through his employer.

Treasuries move higher on concerns about economy (AP)
AP - Treasury bonds rose Monday as investors fled the stock market amid growing concerns about the financial sector. A Federal Reserve official warned that financial companies' problems might worsen, and a Wall Street analyst raised questions about government lenders Freddie Mac and Fannie Mae.

Financial worries weigh on Wall Street (Reuters)
Reuters - Stocks fell on Monday on concerns that the top two mortgage providers would have to raise even more capital, severely devaluing existing shareholders' stakes, while big energy companies fell along with oil prices.

Stocks fall on worries about financial sector (AP)
AP - Wall Street lost more ground in extremely volatile trading Monday, as investors recoiled at a cautious economic outlook from a Federal Reserve official and the possibility of more financial troubles of Fannie Mae and Freddie Mac.

IndyMac to stop most mortgage loans and cut 3,800 jobs (Reuters)
Reuters - IndyMac Bancorp Inc , one of the largest U.S. mortgage lenders, said on Monday it will eliminate 3,800 jobs and stop making most home loans after regulators concluded it was no longer "well-capitalized."

IndyMac stops new loans, to cut work force by half (AP)
AP - Mortgage lender IndyMac Bancorp Inc., struggling to raise capital to stay in business, said Monday it has stopped accepting new loan submissions in its main mortgage lending divisions and plans to slash 3,800 jobs, or more than half of its work force.

Fannie, Freddie shares gain after OFHEO comments (Reuters)
Reuters - Shares of Fannie Mae and Freddie Mac , the two largest providers of U.S. mortgage finance, rose after their regulator said on Tuesday that they should have adequate returns to raise capital.

Fed plans new rules to protect future homebuyers (AP)
AP - The Federal Reserve, trying to stabilize a shaky U.S. financial system, may give squeezed Wall Street firms more time to tap the central bank's emergency loan program, chairman Ben Bernanke said Tuesday.

Stocks fluctuate after Bernanke talk; oil down (AP)
AP - Wall Street fluctuated Tuesday, with investors still jittery about the nation's ailing financial system but relieved to hear Federal Reserve chairman Ben Bernanke say the central bank might extend its lending efforts to investment banks.

SEC finds shortcomings in credit raters (Reuters)
Reuters - Credit rating agencies did not properly manage their conflicts of interests when assigning ratings to structured products such as mortgage-backed securities, a report by the U.S. Securities and Exchange Commission said on Tuesday.

ALL BUSINESS: Wall Street CEOs should return pay (AP)
AP - If Wall Street CEOs really want to revive their credibility, they should return the bloated bonuses they got when they made what eventually turned into wrongheaded bets on the mortgage market.

Ka-ching! Consumers borrow mostly on credit cards (AP)
AP - Consumers boosted their borrowing in May, mostly reflecting heavy credit card use to finance their purchases.

Fannie, Freddie rise after dive a day earlier (AP)
AP - Shares of mortgage financiers Fannie Mae and Freddie Mac bounced back Tuesday, a day after plunging over worries the pair might need billions of dollars in new capital if a new accounting rule is put into effect.

IndyMac depositors pull cash as mortgage woes grow (Reuters)
Reuters - Mortgage lender IndyMac Bancorp Inc said on Tuesday depositors had been withdrawing cash at an "elevated" pace since a key U.S. senator questioned its ability to survive the housing crisis.

Bearish Murdoch sees another year of stock trouble (AP)
AP - Rupert Murdoch expects the capital markets to lurch through the next 12 months as Wall Street banks sift through mountains of bad debt related to the mortgage crisis, the News Corp. chairman said Wednesday.

Wachovia names Steel CEO, sees loss (Reuters)
Reuters - Wachovia Corp , the fourth-largest U.S. bank, named senior Treasury Department official Robert Steel chief executive, and said mortgage and legal problems would result in a $2.6 billion to $2.8 billion second-quarter loss, much larger than many analysts expected.

Deputy US Treasury chief named to head Wachovia bank (AFP)
AFP - Wachovia Corp named US Treasury Department Under Secretary Robert Steel as its new chief executive Wednesday after the commercial banking giant ousted its previous CEO over hefty mortgage-related losses.

June home foreclosures up 53 percent (Reuters)
Reuters - Home foreclosure filings jumped 53 percent in June from a year earlier, although they were down 3 percent from May, and foreclosures are expected to rise further, real estate data firm RealtyTrac said on Thursday.

Fannie, Freddie insolvent, Poole tells Bloomberg (Reuters)
Reuters - Mortgage lenders Fannie Mae and Freddie Mac are "insolvent" and may need a U.S. government bailout, former St. Louis Federal Reserve President William Poole was quoted as saying in an interview with Bloomberg.

Stocks extend gains on Bernanke's testimony (Reuters)
Reuters - Stocks added to gains on Thursday as a source familiar with Federal Reserve Chairman Ben Bernanke's testimony said the central bank chief will tell the House Financial Services Committee that government efforts are focused on helping the financial system return to normal.

Fannie, Freddie stocks and bonds plummet (Reuters)
Reuters - A firestorm of anxiety over the ability of U.S. mortgage giants Fannie Mae and Freddie Mac to get the capital they need to survive sent their debt and stocks plummeting on Thursday.

White House focusing on legislation for Fannie and Freddie (Reuters)
Reuters - The White House remains focused on passing legislation on Fannie Mae and Freddie Mac that will give confidence to the financial markets, a White House spokesman said on Thursday, amid ongoing concerns about the mortgage finance heavyweights' capital levels.

McCain says U.S. cannot let Fannie, Freddie fail (Reuters)
Reuters - Republican presidential candidate Sen. John McCain said on Thursday that the United States could not allow government-sponsored mortgage finance giants Fannie Mae and Freddie Mac to fail.

Obama aide: Fannie and Freddie woes reflect economy (Reuters)
Reuters - Presidential candidate Barack Obama's top economic aide said on Thursday that the difficulties facing mortgage giants Fannie Mae and Freddie Mac reflected the softness in the U.S. economy.

Rates on 30-year mortgages rise, other rates mixed (AP)
AP - Rates on 30-year mortgages edged up this week, while rates on other home loans were a mixed bag.

US mortgage sector primed to run for covered bonds (FT.com)
FT.com - Hank Paulson, US Secretary of the Treasury, has found a potential source of hope for the moribund US mortgage market in a European funding mechanism that he believes could boost investor confidence and cut costs for American home-buyers.

Fears rise on trillion-dollar trouble for Fannie, Freddie (AFP)
AFP - A downward spiral for mortgage giants Fannie Mae and Freddie Mac was unabated Thursday despite reassuring comments from Treasury Secretary Henry Paulson, as fears grew about the firms which underpin trillions of dollars in the housing system.

AIG, other mortgage insurers fall on loss fears (Reuters)
Reuters - Shares of American International Group Inc , the world's largest insurer, fell 8.2 percent on Thursday on concerns that a rating cut at its mortgage insurance unit could signal more losses in the pipeline.

GE to sell Japanese consumer finance arm to Shinsei (AFP)
AFP - US conglomerate General Electric Co. will sell its Japanese consumer finance arm to Shinsei Bank in a multi-billion dollar deal, a newspaper reported Friday.

Fannie, Freddie sink on government rescue fears (AP)
AP - Fears that the government will be forced to rescue Fannie Mae and Freddie Mac could well become a self-fulfilling prophecy.

Shinsei to buy GE's Japanese finance unit (AFP)
AFP - Japan's Shinsei Bank said Friday it had agreed to buy US giant General Electric's Japanese consumer finance arm for 580 billion yen (5.4 billion dollars) in a major push into the troubled sector.

Shinsei to buy GE's Japan finance unit (AP)
AP - Midsize Japanese lender Shinsei Bank Ltd. said Friday it would acquire the local financial arm of General Electric Co. for 580 billion yen ($5.4 billion) in a bid to boost its consumer finance business.

Fannie, Freddie keep plunging (Reuters)
Reuters - Shares of Fannie Mae and Freddie Mac plunged anew on Friday on the latest set of concerns about their future after the New York Times reported the U.S. is considering taking over the two finance companies if their funding problems worsen.

White House presses Congress on Fannie-Freddie legislation (Reuters)
Reuters - The "best thing" for Fannie Mae and Freddie Mac right now would be for Congress to pass new oversight legislation, the White House said on Friday, amid growing concerns about the mortgage giants' funding problems.

Fannie, Freddie shares plummet on NYSE after market open (Reuters)
Reuters - Shares of Fannie Mae and Freddie Mac plunged after the market open on Friday, after a New York Times report said the U.S. government is considering a takeover of the housing finance giants amid funding problems.

Freddie, Fannie shares sink on bailout concerns (AP)
AP - Shares of Freddie Mac plummeted Friday as Wall Street and Washington became more convinced that the government is likely to bail out the nation's key mortgage financiers.

Stocks tumble on Fannie, Freddie, oil (Reuters)
Reuters - Stocks slid on Friday on concerns about the stability of home financing providers Freddie Mac and Fannie Mae , and the impact of record oil prices on the economy and fueling inflation.

Stock decline as Fannie, Freddie fall sharply (AP)
AP - Stocks tumbled Friday as investors focused on troubles at mortgage companies Fannie Mae and Freddie Mac and watched oil prices climb further into record territory.

Key US mortgage lenders in shares meltdown (AFP)
AFP - Shares of US mortgage finance giants Fannie Mae and Freddie Mac were in a freefall Friday on heightened concerns the trillion-dollar firms may face insolvency or a government takeover.

Government mulls Fannie Mae, Freddie Mac takeover: report (Reuters)
Reuters - The U.S. government may take over Fannie Mae and Freddie Mac if their funding problems worsen, the New York Times said on Friday, causing shares of the mortgage finance companies to plunge.

GE profit falls, meets estimates, sells loan unit (AP)
AP - Industrial and financial conglomerate General Electric Co. said Friday its profit fell 6 percent in the second quarter, and has agreed to sell its Japanese consumer finance business for $5.4 billion.



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