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Personal Finance News 01/2009



Street looks to '09 with relief after terrible '08 (AP)
AP - The last trading day of 2008 on Wall Street provided a merciful end to an abysmal year — the worst since the Great Depression, wiping out $6.9 trillion in stock market wealth. Six years of stock gains disappeared as the economy crumbled and markets crashed around the globe, shaking the confidence of professional and individual investors alike.

Estate Planning in a Down Market (BusinessWeek Online)
BusinessWeek Online - When times are tough, people tend to hold on to what they have that much more tightly. But for those who can get beyond that psychological response, there's a silver lining in today's combination of depressed asset values and low interest rates: Transferring assets to the next generation has rarely been less costly.

Wells Fargo completes Wachovia purchase (Reuters)
Reuters - Wells Fargo & Co said it has completed its roughly $12.7 billion purchase of Wachovia Corp, a big bet that it properly assessed the risks in Wachovia's huge book of mortgage and real estate loans.

Standout 2008 fund managers staying defensive (AP)
AP - Playing it safe paid off in 2008 for Tom Forester and David Ellison, two standout mutual fund managers in a year when winning meant losing less money than the competition.

Fannie says IndyMac has $1 bln in mortgage obligations: report (Reuters)
Reuters - Fannie Mae , the largest U.S. home funding company, believes that failed mortgage lender IndyMac has obligations to repurchase around $1 billion of home mortgages that failed to meet Fannie's standards, the Wall Street Journal said, citing people familiar with the situation.

British house prices fell at record rate in 2008 (AP)
AP - House prices in Britain fell in 2008 at their fastest rate for at least 25 years, the country's biggest mortgage lender said Friday, stoking market expectations that the Bank of England will cut borrowing costs further next week.

Estate Planning in a Down Market (BusinessWeek Online)
BusinessWeek Online - When times are tough, people tend to hold on to what they have that much more tightly. But for those who can get beyond that psychological response, there's a silver lining in today's combination of depressed asset values and low interest rates: Transferring assets to the next generation has rarely been less costly.

Plan B for retirees who counted on home equity (AP)
AP - The safety net is almost gone, the nest egg is cracking.

Private equity group buying IndyMac assets (Reuters)
Reuters - The assets of failed U.S. mortgage lender IndyMac are being bought by a group of private equity and hedge fund firms, including Dune Capital Management and J.C. Flowers & Co, which are putting up $1.3 billion in cash.

Estate Planning in a Down Market (BusinessWeek Online)
BusinessWeek Online - When times are tough, people tend to hold on to what they have that much more tightly. But for those who can get beyond that psychological response, there's a silver lining in today's combination of depressed asset values and low interest rates: Transferring assets to the next generation has rarely been less costly.

NY Fed begins purchasing mortgage securities (AP)
AP - The Federal Reserve Bank of New York said Monday it has begun purchasing mortgage-backed securities in an effort to bolster the battered housing market.

Lawmakers set new mortgage bankruptcy bill (Reuters)
Reuters - Legislation designed to stem foreclosures by allowing bankruptcy judges to erase some mortgage debt will be introduced by Congressional Democrats on Tuesday, and hopes are high that it will pass after a similar plan failed last year.

Madoff scandal, SEC role under scrutiny (AP)
AP - Two more months of mortgage payments and retiree Allan Goldstein says he'll be broke, just another victim in what may be the biggest Ponzi scheme in history.

British house prices sink by record amount in 2008 (AP)
AP - House prices in Britain fell by their biggest annual amount in at least 56 years during 2008, as credit seized up and possible buyers stayed out of the market, a leading mortgage lender said Tuesday.

Leading Democrat offers mortgage aid bill (Reuters)
Reuters - The second-ranking Democrat of the U.S. Senate on Tuesday introduced legislation that would let bankruptcy judges erase some mortgage debt in an effort to stem foreclosures.

Fed and other agencies to join U.S. fraud task force (Reuters)
Reuters - The U.S. government is beefing up a task force to fight mortgage crimes and safeguard federal financial bailouts, the U.S. Justice Department said on Tuesday.

Banks may need to raise fresh capital in '09: Whitney (Reuters)
Reuters - U.S. banks will have to raise fresh capital in 2009, and a sharp increase in credit-rating downgrades on mortgage-related securities will lead to further stresses on the companies' capital, according to prominent banking analyst Meredith Whitney.

(AP)
AP - Paulson says allowing mortgage giants Fannie Mae and Freddie Mac to return to their old operating ways is not an option.

Obama plans to keep Republican FDIC chair Bair: report (Reuters)
Reuters - Democratic President-elect Barack Obama intends to retain Federal Deposit Insurance Corp head Sheila Bair, who has pushed for fast mortgage modifications, according to a report on Wednesday.

Investors buy $558 million in mortgages from FDIC (AP)
AP - A group of private investors including former executives of Countrywide Financial Corp. has purchased $558 million in home mortgages from the government in a deal involving assets of the failed First National Bank of Nevada, the investors announced Wednesday.

Paulson says changes needed at Fannie, Freddie (AP)
AP - Treasury Secretary Henry Paulson on Wednesday said the best option for the future of Fannie Mae and Freddie Mac could be for the mortgage giants to be run like public utilities.

Citigroup, U.S. senators in mortgage legislation talks: report (Reuters)
Reuters - Citigroup Inc is leading other lenders in advanced talks with key U.S. senators on legislation that would allow judges to set new repayment terms for millions of mortgage holders who wind up in bankruptcy court, the Wall Street Journal said, citing people involved in the talks.

Obama's performance czar has tried to improve IRS (AP)
AP - Nancy Killefer, the management consultant chosen by President-elect Barack Obama to make federal agencies work better for the public, has a lot of experience trying to improve the agency taxpayers love to hate, the Internal Revenue Service.

GMAC says backs ResCap, without committing to it (Reuters)
Reuters - Finance company GMAC LLC expressed support for its money-losing Residential Capital LLC mortgage unit on Thursday but stopped short of a commitment to keep the big home loan provider in business.

Mortgage giants extend suspensions of foreclosures (AP)
AP - Mortgage giants Fannie Mae and Freddie Mac said Thursday they will extend the suspension of foreclosure sales and evictions from single-family homes through the end of January.

Consumer credit posts record drop in November (Reuters)
Reuters - Consumer borrowing dropped by a record $7.94 billion in November, a Federal Reserve report showed on Thursday, the latest evidence that households were unwilling or unable to take on more credit.

Stocks up on expected foreclosure deal but Dow off (Reuters)
Reuters - Most U.S. stocks rose on Thursday after news that Citigroup Inc agreed to support legislation aimed at stemming home loan foreclosures, offsetting Wal-Mart's disappointing sales and outlook.

Considering dumping a mutual fund? Think twice (AP)
AP - Fiscal fitness is knocking weight loss off the top of many New Year's resolution lists, thanks to 2008's market drubbing. That often means casting off last year's worst-performing mutual funds for more promising alternatives.

Stocks end mostly higher after mortgage deal (AP)
AP - A deal to help head off more mortgage foreclosures pulled Wall Street out of a slump Thursday, giving stocks a mostly higher close. Democratic lawmakers reached an agreement with Citigroup Inc. on a plan to let bankruptcy judges alter loans in an effort to prevent homes from going into foreclosure. Other lenders are expected to follow suit.

Citi backs measure to help avoid foreclosures (Reuters)
Reuters - Financial giant Citigroup Inc will support a proposal in Congress to rewrite U.S. bankruptcy law to help troubled mortgage borrowers avoid foreclosure, Chief Executive Vikram Pandit said on Thursday.

Citi reaches deal with lawmakers on home loans (AP)
AP - Democratic lawmakers have reached a deal with Citigroup Inc. on a plan to let bankruptcy judges alter home loans in an effort to prevent foreclosures and urged other lenders to follow suit.

Wall Street: The Bright Side of a Bad 2008 (BusinessWeek Online)
BusinessWeek Online - Last year was that rare wrinkle in history when everything that could go wrong did go wrong. Stocks and real estate imploded. Bank failures abounded. Fannie Mae, Freddie Mac, and AIG became wards of the state, while the Federal Reserve had to double its balance sheet in the course of a few weeks.

Obama team working on overhaul of financial rescue (Reuters)
Reuters - President-elect Barack Obama's economic team is working to overhaul the $700 billion financial rescue program to stem mortgage foreclosures and spur the flow of credit to the struggling U.S. economy, an Obama aide said on Friday.

Panel criticizes Treasury use of TARP funds (Reuters)
Reuters - The U.S. Treasury has done nothing to ensure a $700 billion financial bailout fund is used to stabilize the weak mortgage market, which caused the U.S. economic crisis, a congressional watchdog said on Friday.

German finance minister calls for lower base income tax rate (AFP)
AFP - German Finance Minister Peer Steinbrueck is mulling a cut in the base income tax rate to 12 percent from 15 percent to help pull Europe's biggest economy out of a deep recession, a spokesman said Friday.

Bank industry slams lawmaker-Citi mortgage deal (Reuters)
Reuters - A top bank industry group said on Friday that it opposes an agreement between Citigroup Inc and Democratic senators that would rewrite U.S. bankruptcy law to help troubled mortgage borrowers avoid foreclosure, saying it could make home loans more expensive.

Lennar denies making improper loan to executive (Reuters)
Reuters - No. 2 U.S. homebuilder Lennar Corp said on Monday that its chief operating officer had not received a mortgage on his home from the company and denied treating its joint ventures like a "Ponzi scheme."

Northern Rock shareholders seek redress in court (AP)
AP - Shareholders in nationalized mortgage lender Northern Rock were going to court Tuesday to try to force the British government to compensate them for their now-worthless stocks.

Even in hard times, don't ignore the IRS (AP)
AP - You've lost your job and your mortgage company is threatening foreclosure. Then, when it seems that things can't get any worse, the tax man comes calling. What's a person to do?

Mortgage applications up as refinancing jumps (Reuters)
Reuters - Mortgage applications jumped in the first full week of 2009 as record low interest rates spurred the greatest demand for home refinancing loans in over 5-1/2 years, data from an industry group showed on Wednesday.

Germany mulling partial nationalisation of HRE bank: party spokesman (AFP)
AFP - The German government is considering partially nationalising distressed mortgage lender Hypo Real Estate (HRE), a spokesman for Chancellor Angela Merkel's CDU party told AFP on Wednesday.

IRS expands free online filing program (AP)
AP - Want a quick tax refund? File your federal tax returns electronically.

Not all target-date funds are created equal (AP)
AP - Bracing for their year-end 401(k) statements, many investors who put money in 2010 target-date mutual funds may be facing a delayed retirement.

Mortgage Rates Fall to Record Lows (BusinessWeek Online)
BusinessWeek Online - Mortgage giant Freddie Mac said on Jan. 15 that rates on 30-year fixed-rate mortgages fell below 5% this week -- the lowest level since it began surveying lenders in 1971.

What Records Can You Really Throw Away? (The Motley Fool)
The Motley Fool - Stashes of old, paid bills, expired life insurance policies, receipts for broken gadgets, and canceled checks for haircuts you got in college -- sound like your filing system?

Financial burden of homeownership spread unequally (AP)
AP - When it comes to homeownership, Hispanics in New Jersey, single parents in California and senior citizens in Rhode Island all have something in common: More than a third have an unaffordable mortgage.

Denmark reveals bank bailout worth $18B in loans (AP)
AP - Danish lawmakers have agreed on a 100 billion kroner ($18 billion) rescue package of loans for banks and mortgage lenders to prevent the credit crunch from deepening.

Mortgage Rates Fall to Record Lows (BusinessWeek Online)
BusinessWeek Online - Mortgage giant Freddie Mac said on Jan. 15 that rates on 30-year fixed-rate mortgages fell below 5% this week -- the lowest level since it began surveying lenders in 1971.

Circuit City collapse could hit real estate investors (Reuters)
Reuters - The collapse of electronics retailer Circuit City could drive down shopping and strip mall rents, and deal another blow to commercial mortgage-backed securities' (CMBS) investors who have already seen their bond prices slide.

Stock futures drop after Microsoft and economic data (Reuters)
Reuters - Stock index futures hit session lows on Thursday after Microsoft Corp reported quarterly results earlier than scheduled in the day, hurting a market already weakened by economic data showing further deterioration in the labor and housing markets.



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