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Personal Finance News 07/2009

Thinking of Switching Financial Planners? (BusinessWeek Online)
BusinessWeek Online - You've got a dirty little secret. During long lunch breaks, or after work when everyone else heads home to their families, you're sneaking out to a secret rendezvous. You know what you're doing is perfectly justified, but you still feel a little bad afterwards. You never thought it would come to this. But here you are -- cheating on your financial planner.

Fed Holds Rates Steady (BusinessWeek Online)
BusinessWeek Online - With signs the economy is improving but still fragile, Federal Reserve policymakers held the Fed funds rate steady -- at zero to 0.25% -- on June 24, and maintained its pace of purchases of government debt at mortgage-backed securities.

U.S. mortgage applications fall to 7-month low (Reuters)
Reuters - U.S. mortgage applications plunged to a seven-month low last week as demand for home refinancing loans tumbled 30 percent, data from an industry group showed on Wednesday.

Freddie Mac gets another $6.1B from gov't (AP)
AP - Battered mortgage giant Freddie Mac received $6.1 billion in new funds from the Treasury Department to help offset its mounting liabilities, according to a regulatory filing submitted Wednesday.

Fannie, Freddie to expand refinance program: source (Reuters)
Reuters - Fannie Mae and Freddie Mac will expand their foreclosure-prevention efforts and refinance homeowners whose loan-to-value ratio is 125 percent, an administration source said on Wednesday.

AIG to sell consumer finance unit in Colombia (AP)
AP - American International Group Inc. on Wednesday said it agreed to sell all of its ownership interests in its consumer finance operations in Colombia, the latest in a recent string of asset sales by the embattled insurer to bolster its finances.

IPO for Genworth's Canadian operations closes (AP)
AP - Genworth Financial Inc. said Tuesday that an initial public offering of 44.7 million shares of its Canadian mortgage insurance operations priced at 19 Canadian dollars ($16.35) per share.

U.S. consumers fall behind on loans at record pace (Reuters)
Reuters - Soaring U.S. unemployment and a shrinking economy drove delinquencies on credit card debt and home equity loans to all-time highs in the first quarter as a record number of cash-strapped consumers fell behind on their bills.

Survey shows racial disparity in 401k savings rate (AP)
AP - A new study of 401(k) plans has revealed that black and Hispanic workers save significantly less for retirement and tap into their accounts more frequently than white and Asian employees.

Falling house prices drive up mortgage fraud (AP)
AP - Falling housing prices are driving up reports of mortgage fraud, with the FBI saying Tuesday that reported losses are up 83 percent last year and climbing even higher in 2009.

U.S. mortgage applications climb eases Fed pressure (Reuters)
Reuters - Demand for U.S. mortgages bounced from seven-month lows last week as average 30-year borrowing costs were unchanged, helping ease pressure for aggressive Federal Reserve actions to push down long-term interest rates.

U.S. consumer credit edges down $3.23 billion in May (Reuters)
Reuters - Total U.S. consumer credit fell by an unexpectedly slight $3.23 billion in May, Federal Reserve data showed on Wednesday, although the previous month's drop was revised to a steeper decline than initially thought.

Treasury picks 9 managers for toxic asset program (AP)
AP - The Treasury Department on Wednesday selected nine financial firms as partners for a program to buy banks' soured, mortgage-related investments.

Report: AIG in talks for unit sale to MetLife (AP)
AP - American International Group Inc. is discussing a deal for all or part of its foreign unit, American Life Insurance Co., with MetLife Inc., according to a published report Wednesday that cited people familiar with the matter.

AIG in talks to sell big Alico unit to MetLife: report (Reuters)
Reuters - American International Group Inc has resumed talks to sell its American Life Insurance Co unit to MetLife Inc in a transaction that could help the stricken insurer raise more than $15 billion, the Financial Times said.

U.S. federal jury rejects $24 mln Altria tax refund (Reuters)
Reuters - Altria Group Inc said it will seek a further review of a federal jury verdict against it that threw out $24 million in tax refunds from investments in utilities and other assets.

Federal jury rejects Altria's tax shelter claim (AP)
AP - A federal jury has rejected a $24 million tax refund claim filed by tobacco company Altria Group Inc.

Nomura tie-up with India's largest life insurer (AFP)
AFP - Japan's top securities firm Nomura Holdings has agreed to an asset-management capital tie-up with Life Insurance Corp. (LIC), India's largest life insurer, a newspaper has reported.

10 tips for managing personal finances (AP)
AP - Many employers are setting up financial advice sessions for employees to help them navigate through the market downturn that has reduced 401(k) balances for most of us. It's a good idea to take advantage of one of these sessions if offered at work. If it's not an option in your workplace, you can review this checklist to make sure you're not forgetting any basics.

Former U.S. Congressman sues Carlyle: report (Reuters)
Reuters - Former Republican Congressman Michael Huffington has filed a lawsuit against Carlyle Group alleging the private-equity firm misrepresented the safety of Carlyle Capital Corp, the publicly traded mortgage-securities fund that collapsed last spring, the Wall Street Journal reported.

Lawmaker to back Obama student loan shake-up (Reuters)
Reuters - The head of a key U.S. congressional panel will introduce legislation on Wednesday calling for ending a college student loan program that for years helped lenders such as Sallie Mae thrive.

Mortgage applications rise as interest rates tumble (Reuters)
Reuters - U.S. mortgage applications rose for a second straight week, driven by a jump in demand for home refinancing loans as interest rates tumbled, data from an industry group showed on Wednesday.

Calpers sues rating agencies over losses (Reuters)
Reuters - Calpers, the biggest U.S. public pension fund, has sued the three largest credit rating agencies for giving perfect grades to securities that later suffered huge subprime mortgage losses.

Fugitive ex-CS trader arrested, faces new charges (Reuters)
Reuters - A former Credit Suisse trader facing trial on charges of fraudulently selling $1 billion worth of mortgage-backed auction-rate securities, has been arrested after two months on the run, according to a court document made public on Wednesday.

Meltdown 101: Preparing for your loan modification (AP)
AP - Homeowners worried about missing mortgage payments and entering foreclosure may have another option: a loan modification.

FTC, 18 states act to stop sham loan consultants (AP)
AP - Prosecutors nationwide filed 189 legal actions Wednesday against loan modification consultants accused of bilking homeowners who are desperate to make their mortgage payments more affordable.

AIG speeds up spinoff of life insurance unit (AP)
AP - American International Group Inc. is speeding up plans to spin off its American Life Insurance Co. unit as an independent public company, the company said Wednesday.

Lawmakers frustrated with foreclosure aid programs (AP)
AP - Lawmakers vented Thursday about the government's inability to solve the nation's housing woes as fresh data showed foreclosure filings continued to rise.

Mortgage rates fall again (AP)
AP - Rates for 30-year home loans dropped for the third-straight week, inching toward a record low reached earlier this year, Freddie Mac said Thursday.

JPMorgan profit tops view though credit worsens (Reuters)
Reuters - JPMorgan Chase & Co said record investment banking and trading results drove quarterly profit 36 percent higher, topping Wall Street forecasts, but reported a surge in consumer credit losses that foreshadows deeper problems on Main Street.

Foreclosures rise 15 percent in first half of 2009 (AP)
AP - The number of U.S. households on the verge of losing their homes soared by nearly 15 percent in the first half of the year as more people lost their jobs and were unable to pay their monthly mortgage bills.

Fed balance sheet rises back above $2 trillion (Reuters)
Reuters - The U.S. Federal Reserve's balance sheet rose back above $2 trillion after dipping below that level earlier this month, bolstered by increased holdings of agency mortgage-backed securities, Fed data showed on Thursday.

AP - Federal judge dismisses SEC insider trading case against Dallas Mavs owner Mark Cuban.

Bank of America credit losses soar, profit falls (Reuters)
Reuters - Bank of America Corp, the largest U.S. bank, posted a quarterly profit that topped Wall Street forecasts but warned of a fresh surge in soured loans to credit card, mortgage and business customers.

Wall Street dips on profit quality worries (Reuters)
Reuters - Stocks fell on Friday on worry over the quality of corporate profits after General Electric Co missed quarterly revenue estimates, discouraging investors after a four-day run-up in Wall Street.

U.S. housing starts, permits jump in June (Reuters)
Reuters - Ground-breaking for new U.S. homes jumped in June, with starts for single-family homes rising at the fastest rate in 4-1/2 years, the government said on Friday in a report that suggested the battered housing sector was beginning to stabilize.

Commercial mortgage failure at 20-year high in U.S.: report (Reuters)
Reuters - Commercial mortgages at U.S. banks have been failing at the fastest rate in nearly 20 years, the Wall Street Journal said, citing its own analysis.

Report: UK mortgage lending up 17 pct in June (AP)
AP - Gross mortgage lending in the United Kingdom rose by 17 percent in June compared to the previous month but still lagged at about half of year-ago levels, the Council of Mortgage Lenders said Monday.

Student Loans: A Bitter Financial Lesson (BusinessWeek Online)
BusinessWeek Online - Where I grew up, it's in bad taste to talk about your personal finances. But with the financial woes of governments, companies, and ordinary people making headlines just about everywhere you look these days, it's about time we had an honest discussion about the great big money mess of 2009.

Manage Your Money Like Warren Buffett (The Motley Fool)
The Motley Fool - If you saw a mysterious $4 entry on your income-tax return, would you sweat it? What if you were a billionaire many times over? Would it even catch your eye?

Credit and consumption; wed and unemployed (AP)
AP - BUY NOW, PAY LATER: Financial institutions helped develop consumer credit in the 1920s, as postwar prosperity raised the standard of living and old ideas about the burdens of debt quickly disappeared. Americans became so enamored of credit and layaways that many couldn't survive without them.

House committee backs Obama student loan reform (Reuters)
Reuters - The $92-billion U.S. college student loan market would be fundamentally reshaped under a bill approved on Tuesday by a congressional committee, which sent the measure on to the full House of Representatives.

Obama sees "battle" as financial plan forges ahead (Reuters)
Reuters - The Obama administration advanced its financial regulation reform agenda on Tuesday, moving ahead on reshaping the $92-billion student loan market and unveiling a proposed shake-up for credit rating agencies.

Sallie Mae 2Q loss attributed to investment losses (AP)
AP - SLM Corp., better known as Sallie Mae, said Tuesday investment losses pushed it to a loss for the second quarter.

Mortgage applications climb but job fears weigh (Reuters)
Reuters - U.S. mortgage applications rose despite a jump in borrowing costs last week, but still bounced around the year's lows with unemployment fears depressing demand.

Wells Fargo profit rises; credit losses up (Reuters)
Reuters - Wells Fargo & Co on Wednesday said quarterly profit increased 47 percent as strong mortgage banking results and the acquisition of Wachovia Corp offset rising credit losses.

NJ woman's bake sale helps make mortgage payment (AP)
AP - A New Jersey woman's bake sale has helped her forestall foreclosure.

Bankrate to be taken private in deal with Apax (AP)
AP - Bankrate Inc. said Wednesday it had agreed to be acquired by New York-based private equity firm Apax Partners in a $571 million deal that will take the consumer-finance Web site operator private.

Fed moves to improve disclosures on mortgages (AP)
AP - The Federal Reserve on Thursday advanced proposals designed to make it easier for Americans with mortgages, or shopping for them, to better understand how the loans work.

Mortgage rates rise after falling for 3 weeks (AP)
AP - Rates for 30-year mortgages have edged up after falling for three-consecutive weeks.

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