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Personal Finance News 08/2008

Judge dismisses class-action bond interest lawsuit (AP)
AP - A North Carolina judge threw out a class-action lawsuit Thursday filed by North Carolina residents seeking refunds on income tax they paid on interest generated from out-of-state bonds.

Congress approves student loan bill (Reuters)
Reuters - Legislation that seeks to protect college students from lending abuses while boosting student aid was approved by Congress on Thursday.

Lehman in talks to sell $30 bln mortgage assets: report (Reuters)
Reuters - Lehman Brothers Holdings Inc is in talks with prospective buyers to sell about $30 billion in commercial mortgage assets and other hard-to-value securities, the New York Post reported on its website.

UK's FSA finds no sign of HBOS share manipulation (Reuters)
Reuters - Britain's financial watchdog has found no evidence that illegal dealing was behind an abrupt fall in the shares of mortgage lender HBOS in March, but warned it would not relax its surveillance of the market.

IndyMac Bancorp files for Chapter 7 bankruptcy (Reuters)
Reuters - IndyMac Bancorp Inc , once one of the largest U.S. mortgage lenders, has filed for bankruptcy protection, less than three weeks after being seized by federal regulators following a bank run by depositors.

Fannie, Freddie seen boosting loss estimates, again (Reuters)
Reuters - U.S. mortgage market giants, Fannie Mae and Freddie Mac , may report further downgrades to their forecasts for credit losses in their upcoming second-quarter results, starting next week.

S&P emails slammed mortgage debt products: report (Reuters)
Reuters - Analysts at Standard & Poor's Rating Services warned against mortgage-related debt products in internal e-mails that, in one case, called the complex financial deals "ridiculous," the Wall Street Journal reported in its weekend edition.

HSBC reports 1H fall in profit (AP)
AP - HSBC Holdings PLC, Europe's largest bank by market value, reported Monday its steepest fall in profit since 2001 as costs for bad U.S. mortgage loans mounted.

HSBC profits sag 28 percent to $10.2 billion on bad debts (Reuters)
Reuters - Europe's biggest bank HSBC reported a 28 percent fall in its first-half profit, in line with forecasts, as a $14 billion hit on bad debts on U.S. home loans and asset writedowns offset strong Asian growth.

Stocks decline following inflation reading (AP)
AP - Stocks declined early Monday after the government issued a stronger-than-expected report on consumer spending that also showed a jump in inflation.

Wachovia shares fall; analyst says sell the stock (Reuters)
Reuters - Wachovia Corp shares fell as much as 10.3 percent on Monday after an analyst said investors should sell the shares of the fourth-largest U.S. bank and avoid the pain likely to result from repairing a balance sheet bloated with mortgage and real estate loans.

Orix and Credit Saison in $106 billionmerger talks (Reuters)
Reuters - Orix Corp (8591.T), Japan's largest leasing company, and consumer credit firm Credit Saison (8253.T) are in merger talks, financial sources close to the matter said on Tuesday, seeking a deal to form a $106 billion finance group.

Freddie Mac chief disregarded warning signs: report (Reuters)
Reuters - U.S. mortgage market giant Freddie Mac's chief executive dismissed internal warnings that could have protected the company from some of the financial problems now engulfing it, the New York Times said, citing more than two dozen current and former high-ranking executives and others.

Lawmakers urge foreclosure delay until Oct 1 (Reuters)
Reuters - Members of a congressional housing market oversight panel on Tuesday again urged the mortgage industry to hold off on foreclosures until legislation meant to help distressed U.S. homeowners can take effect on October 1.

Treasury hires Morgan Stanley as GSE adviser (Reuters)
Reuters - The Treasury said on Tuesday it hired Morgan Stanley as an adviser to help it analyze and better understand its new authorities to backstop housing finance giants Fannie Mae and Freddie Mac

Treasury hires Morgan Stanley on Fannie, Freddie (AP)
AP - The Treasury Department said Tuesday it had hired investment firm Morgan Stanley to help the government assess the risks facing mortgage giants Fannie Mae and Freddie Mac.

Fannie Mae raises fees again to mitigate losses (Reuters)
Reuters - Fannie Mae has raised some fees on mortgage loans its purchases, marking the fourth increase in 10 months, to reflect higher credit risk and offset losses from continuing market deterioration.

Subprime meltdown behind worst stock market slide since 2001-2002 (AFP)
AFP - The collapse of the subprime mortgage market in the United States and the subsequent global financial crisis has provoked the sharpest fall on world stock markets since the end of the Internet bubble in 2001-2002.

Morgan Stanley to freeze home-equity credit lines: report (Reuters)
Reuters - Morgan Stanley told thousands of clients this week that they will not be allowed to withdraw money on their home-equity credit lines, Bloomberg News reported Wednesday, citing a person familiar with the situation. Most of the clients had properties that have lost value, the agency reported, citing a person who declined to be identified.

Freddie Mac swings to 2Q loss (AP)
AP - Freddie Mac on Wednesday posted a second-quarter loss more than three-times larger than Wall Street expected as more homeowners fell behind on their mortgages.

Freddie Mac loses $821 mln in 2nd quarter (AFP)
AFP - Troubled mortgage finance giant Freddie Mac on Wednesday reported an 821-million-dollar net loss in the second quarter, as the US housing collapse further dug a hole in the company's finances.

Freddie posts 4th-straight loss, to slash dividend (Reuters)
Reuters - Freddie Mac on Wednesday posted its fourth straight quarterly loss as it braced for a prolonged housing crisis by setting aside twice as much money for bad loans and setting plans to slash its dividend by at least 80 percent.

Wall Street declines on Freddie Mac loss (AP)
AP - Stocks declined Wednesday, a day after a big rally, as troubled mortgage financier Freddie Mac reported a larger-than-expected second-quarter loss and touched off fresh concerns about the financial sector.

Conn. sues Countrywide over lending practices (AP)
AP - Connecticut sued Countrywide Financial Corp. on Wednesday, becoming the latest state to take the mortgage lender to court over its lending practices.

Market rises on Cisco outlook and drop in oil (Reuters)
Reuters - Stocks rose on Wednesday, building on the previous day's big gains, as a further drop in oil prices and a reassuring outlook from Cisco Systems overshadowed persistent credit concerns.

Insurer AIG posts 2nd-quarter loss on write-downs (Reuters)
Reuters - American International Group Inc , the world's largest insurer, posted its third consecutive quarterly net loss on Wednesday, hurt again by the write-down of derivatives linked to bad mortgage investments.

Insurer AIG posts large loss on bad mortgage bets (Reuters)
Reuters - American International Group Inc posted its third consecutive quarterly net loss of more than $5 billion on Wednesday as it wrote down bad mortgage-related investments, sending its shares down almost 8 percent.

Freddie Mac's rising losses bode ill for US housing crisis (AFP)
AFP - Troubled mortgage finance giant Freddie Mac reported a shocking loss in the second quarter that bodes ill for the US taxpayer after the government's huge rescue package.

AIG's huge 2Q loss shows credit market woes linger (AP)
AP - American International Group Inc. posted its third straight quarterly loss, a rude awakening to investors hoping that troubles in the insurer's mortgage market investments were starting to level off.

Delinquencies for 2007 mortgages outpacing 2006: report (Reuters)
Reuters - Delinquencies of prime mortgages originated in 2007 are outpacing those made in 2006, suggesting the U.S. housing and financial crisis may be deeper than initial estimates, the Wall Street Journal said on Thursday.

AIG sees up to $8.5 billion in cash losses from CDS (Reuters)
Reuters - American International Group Inc said on Thursday potential cash losses on its portfolio of credit default swaps tied to risky mortgage debt could be as high as $8.5 billion, much more than previously disclosed.

Stocks pare losses on rise in pending home sales (AP)
AP - Stocks have pared their losses following a report that pending U.S. home sales rose in June, rather than declining as expected.

Consumer credit rose $14.33 bln in June (Reuters)
Reuters - U.S. consumer credit expanded at the fastest rate in seven months in June as Americans turned to credit cards and consumer loans to maintain spending in the face of rising food and energy costs, a government report on Thursday showed.

Why Their Economic Plans Don't Add Up (BusinessWeek Online)
BusinessWeek Online - As he crisscrosses the country in his quest for the Presidency, Senator John McCain frequently repeats his vow to keep today's low income tax rates in place, take a further whack at the estate tax, and ease the tax burden on business. "I want to look you in the eye," he said at a July 30 town hall meeting at a local Caterpillar dealer in Aurora, Colo. "I will not raise your taxes nor support a tax increase. I will not do it."

Fannie Mae loses $2.3B in quarter as defaults rise (AP)
AP - Mortgage finance company Fannie Mae swung to a second-quarter loss that was more than triple what Wall Street expected as conditions in the housing market continued to deteriorate.

Fannie Mae posts massive $2.3bln loss (AFP)
AFP - Struggling home finance giant Fannie Mae Friday reported a massive second quarter loss of 2.3 billion dollars, more than three times analysts' estimates.

Fannie Mae posts massive $2.3bln loss (AFP)
AFP - Struggling home finance giant Fannie Mae Friday reported a massive second-quarter loss of 2.3 billion dollars, more than three times analysts' estimates.

Fannie Mae posts hefty loss, cuts dividend (Reuters)
Reuters - Fannie Mae , the largest U.S. home funding source, on Friday posted its fourth straight quarterly loss as home loan defaults increased and said it would slash its dividend more than 85 percent and take other steps to shore up its capital position.

Wall Street jumps as oil drops (Reuters)
Reuters - Stocks rose on Friday as a further drop in oil prices buoyed hopes that inflation will ease, stimulating spending by businesses and consumers, which would restore corporate profit growth.

Stocks advance as oil prices decline (AP)
AP - Stocks rebounded Friday from a sell-off a day earlier as a sharp drop in oil prices eased worries over a quarterly loss from mortgage finance company Fannie Mae that was more than triple what Wall Street expected. The Dow Jones industrials rose more than 100 points.

Wachovia cuts back mortgage lending-report (Reuters)
Reuters - Wachovia Corp , the fourth-largest U.S. bank, will stop making mortgage loans through its branch offices in 19 U.S. states, a published report said.

Credit unions hit by mortgage-market problems: report (Reuters)
Reuters - Five of North America's largest credit unions are reporting big paper losses on mortgage-related securities, a sign that housing-market distress is spreading even to the most risk-averse financial sectors, the Wall Street Journal (WSJ) said on Monday.

S&P cuts Fannie, Freddie preferred stock (Reuters)
Reuters - Standard & Poor's on Monday slashed the preferred stock ratings of Fannie Mae and Freddie Mac , and said the U.S. mortgage funding giants presented a greater risk to the government.

Countrywide faces FTC probe over loan servicing (Reuters)
Reuters - Countrywide Financial Corp, which was the largest U.S. mortgage lender before being acquired by Bank of America Corp , faces a Federal Trade Commission probe into whether its loan-servicing activities violated federal law.

Wachovia to cut 600 more jobs than earlier planned (AP)
AP - Wachovia Corp. said Monday it plans to cut 600 more jobs than it previously expected as it works to reduce expenses in the face of staggering losses tied to mortgage debt.

Most companies in US avoid federal income taxes (AP)
AP - Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress.

UBS posts Q2 losses, writedowns of $5.1B (AP)
AP - UBS AG, one of the hardest hit banks in the subprime mortgage crisis, said Tuesday that it had further losses and writedowns of $5.1 billion during the second quarter of 2008.

JPMorgan Chase: More mortgage market losses for 3Q (AP)
AP - JPMorgan Chase & Co. revealed Monday that it has incurred more substantial losses in its mortgage investments so far in the third quarter than it did in the previous three months.

JPMorgan loses $1.5 billion so far in third quarter (Reuters)
Reuters - Investment bank JPMorgan Chase & Co has incurred losses of about $1.5 billion since the start of July, hurt by turmoil in the credit and mortgage markets and by wider credit spreads and lower levels of liquidity, the company said in a regulatory filing late Monday.

Worries about credit losses weigh on Wall Street (Reuters)
Reuters - U.S. stocks fell on Tuesday, as bank shares tumbled on fresh worries about the economy and further losses stemming from the mortgage crisis.

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