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Personal Finance News 07/2011



Mortgage exec gets 30 years for $3 billion fraud (AP)
AP - An executive convicted of orchestrating a nearly $3 billion fraud as chairman of one of America's largest private mortgage companies was sentenced Thursday to 30 years in prison by a judge who accused him of lacking remorse.

Spain to help struggling mortgage holders (AFP)
AFP - Spain's government approved measures Friday to help the soaring number of homeowners, many jobless, who cannot pay their mortgages.

Analysis: BofA now needs to focus on Basel III levels (Reuters)
Reuters - Bank of America Corp's decision to resolve $14 billion worth of mortgage backed securities-related liabilities might have boosted its stock and bond prices, but it has put it further behind its peers in the race to build up enough capital to be Basel III compliant.

Banks cutting principal on some mortgages: report (Reuters)
Reuters - Bank of America Corp and JPMorgan Chase & Co have started modifying tens of thousands of mortgages where the banks deem the loans especially risky, even if the borrowers have not asked, the New York Times reported on Sunday.

Banks cutting principal on some mortgages: report (Reuters)
Reuters - Bank of America Corp and JPMorgan Chase & Co have started modifying tens of thousands of mortgages where the banks deem the loans especially risky, even if the borrowers have not asked, the New York Times reported on Sunday.

Borrowers sue over apparent loan mod mishaps (AP)
AP - It seemed Maria Campusano's financial problems were behind her when the mortgage on her Victorian home in a Massachusetts mill town was chopped by hundreds of dollars a month.

NY subpoenas nine life insurance companies: source (Reuters)
Reuters - New York's top legal officer has sent subpoenas to nine leading life insurers seeking information about their practices in identifying and paying out policies for deceased customers, according to a person familiar with the matter.

Bank of America $8.5 billion mortgage pact challenged (Reuters)
Reuters - A group of bondholders plans to challenge Bank of America Corp's $8.5 billion settlement with holders in soured mortgage-backed securities, saying it may be unfair to other bond investors.

Bond-holders challenge Bank of America settlement (AFP)
AFP - A group of bond-holders on Tuesday challenged Bank of America's record $8.5 billion settlement for losses on mortgage-backed securities, clouding its efforts to move past the subprime mortgage mess.

Bank of America settlement faces challenge (AP)
AP - Bank of America's $8.5 billion settlement with investors over poor-quality mortgage bonds is facing a new challenge.

Mortgage applications fell last week: MBA (Reuters)
Reuters - Purchase applications for U.S. home mortgages rose last week, but refinancing activity plunged as interest rates jumped, an industry group said on Wednesday.

British house prices rise in June: survey (AFP)
AFP - British house prices rose by 1.2 percent in June from the level in May, data from a major home-loans provider showed on Wednesday.

This Is the Worst Kind of Tax Cut (The Motley Fool)
The Motley Fool - Most of us go about our days unaware that we have an advocate at the IRS, fighting for us. She's Nina Olson, and she recently delivered her "Fiscal Year 2012 Objectives" report to Congress, laying out her goals for the coming year. Her team's thoughts and suggestions make a lot of sense -- especially her worry about proposed budget cuts for the IRS.

BofA loses bid to end nationwide mortgage lawsuit (Reuters)
Reuters - Bank of America Corp lost its bid to dismiss a nationwide lawsuit accusing it of reneging on promises to help borrowers modify their mortgage loans under a much-criticized federal program.

BofA loses bid to end HAMP mortgage lawsuit (Reuters)
Reuters - Bank of America Corp lost its bid to dismiss a lawsuit accusing it of reneging on promises to help borrowers modify their mortgage loans under a much-criticized federal program.

Rate on 30-year fixed mortgage rises to 4.60 pct. (AP)
AP - Fixed mortgage rates rose this week by the most in four months.

Tax hike, amnesty plan boost Illinois revenue (Reuters)
Reuters - Illinois' fiscal 2011 revenue jumped nearly $3.4 billion over fiscal 2010 collections due mainly to a big income tax rate hike and a tax amnesty program, a legislative commission reported on Thursday.

BofA to take $13 billion more in charges: Bernstein (Reuters)
Reuters - Bank of America will take another $13 billion in charges related to pending settlement with private label mortgage-backed securities investors, Sanford C Bernstein said.

Consumers borrowed more for 8th month in May (AP)
AP - Americans took on more debt in May and used their credit cards more for only the second time in nearly three years, stepping up borrowing just as the economy began to slump and hiring slowed.

Consumer credit rose $5.08 billion in May (Reuters)
Reuters - U.S. consumer credit rose by another $5.08 billion in May, according to a Federal Reserve report on Friday that suggested a willingness to keep borrowing despite a tight job market.

Consumers borrowed more for 8th month in May (AP)
AP - Americans took on more debt in May and used their credit cards more for only the second time in nearly three years. Consumers stepped up their borrowing just as the economy began to slump and hiring slowed.

Summary Box: Consumer borrowing up for 8th month (AP)
AP - CONSUMER CREDIT: Americans took on more debt in May for the eighth straight month. The increase pushed total consumer credit to a seasonally adjusted annual level of $2.43 trillion. That's 1.7 percent higher than the four-year low reached in September.

Wall Street uses Wal-Mart bias ruling in MBS defense (Reuters)
Reuters - The U.S. Supreme Court's dismissal of a massive sex-bias case against Wal-Mart Stores Inc may have handed Wall Street a new weapon in its battle against angry investors who lost billions on securitized home loans.

Wells Fargo to pay $125 million in mortgage suit (AP)
AP - Wells Fargo & Co. has agreed to pay $125 million to a group of pension funds and other investors to settle allegations the bank failed to warn investors of the risks the poorly-written mortgage backed securities.

Spanish mortgage defaulters face debt nightmare (AP)
AP - Inma Rodriguez lost her job, and now that she's defaulted on her mortgage, she's about to lose her home. But the nightmare doesn't end there: Once creditors kick her out, she'll still need to pay back the money she borrowed to buy her house.

Nelnet buys residual interest in federal student loan (Reuters)
Reuters - Nelnet said it bought a residual interest in $1.9 billion of federal student loan from an affiliate of Greystone & Co Inc.

Rep. Frank backs higher Fannie, Freddie loan limits (Reuters)
Reuters - Congress should permanently extend increased loan limits on mortgages backed by Fannie Mae and Freddie Mac that are set to expire, the top Democrat of the House Financial Services Committee said on Monday.

Deutsche Bank seeks to end U.S. mortgage fraud case (Reuters)
Reuters - Deutsche Bank AG (DBKGn.DE) asked a Manhattan judge to dismiss a government lawsuit accusing it of fraud for repeatedly lying about the quality of mortgages it handled under a federal program.

1 Sizzling Hot and Spicy Buy (The Motley Fool)
The Motley Fool - Even in a market plagued with increasing input costs and forever shifting consumer loyalty, spice maker McCormick (NYSE: MKC - News) managed to deliver sound second-quarter results. A double-digit growth in both revenue and profit has suddenly made this stock look a lot spicier. It's time Fools take notice.

Bill to reform Fannie, Freddie unlikely soon (Reuters)
Reuters - The U.S. housing finance system badly needs an overhaul, but chances for winding down ailing mortgage giants Fannie Mae and Freddie Mac in the near term are remote, the top Republican on the U.S. House of Representatives Financial Services Committee said on Tuesday.

Balance the Budget Deficit in 3 Easy Steps (The Motley Fool)
The Motley Fool - No one in Washington can agree on how to narrow the budget deficit. Not even balance. Just narrow.

An Aftermarket Retailer With Growing Potential (The Motley Fool)
The Motley Fool - Rising gas prices have weighed on auto sales this year. Not surprisingly, overall sales are down, but sales of fuel-efficient cars are soaring. But even if we wanted to buy a regular car, many of us are still slowly recovering from the recession. This has the obvious effect of pushing up the need for ongoing maintenance on our existing vehicles.

New York probes Bank of America $8.5 billion mortgage pact (Reuters)
Reuters - New York's attorney general is investigating Bank of America Corp's $8.5 billion settlement with investors over losses in mortgage-backed securities, and has sought data from 20 institutional investors that agreed to the accord.

How the Brand-New Debit Fee Cap Will Affect Investors (The Motley Fool)
The Motley Fool - Visa (NYSE: V - News) warned of slower growth in revenue and earnings for fiscal 2012. The news comes after the Federal Reserve issued its final regulation on debit card fees. This not only affects Visa, but several other companies in the space, too.

Can You Bank on Royal Bank of Canada? (The Motley Fool)
The Motley Fool - Canadian banks are reporting impressive earnings and offering good income to investors. Despite Royal Bank of Canada (NYSE: RY - News) posting a leap in profits in its latest quarter, it failed to impress investors. I decided to put it through the wringer to see whether it deserves space in my portfolio.

Your Portfolio Better Get Ready to Habla Espanol o Portugues (The Motley Fool)
The Motley Fool - After China/India, Latin America is the region capturing the greatest attention from corporate America. The region is being touted as the spark that could ignite greater global economic growth. Many companies are keen on grabbing the opportunity with both hands.

Even Down 22%, This Stock Is Grossly Overvalued (The Motley Fool)
The Motley Fool - I don't know what's gotten into the coffee sector, but investors seem to like it. Whether it's the caffeinated beverages or the rising price of coffee beans worldwide, investors are sipping up coffee stocks like they're going out of style -- and it's producing some sky-high valuations.

Mortgage rates for the past 52 weeks, at a glance (AP)
AP - Mortgage rates for the past 52 weeks, at a glance

Dexia sues Deutsche Bank over US mortgage securities (AFP)
AFP - French-Belgian bank Dexia said Thursday that it was suing Deutsche Bank for more than $1 billion in losses caused by dodgy mortgage-backed securities that imploded during the 2008 financial crisis.

50 Things You Should Feel Great About (The Motley Fool)
The Motley Fool - There are no jobs. Washington is a mess. Greece is nearly bankrupt. Italy isn't far behind. North Dakota is flooded. Arizona is an inferno. Oil is nearly $100 a barrel. Forty Mexicans were killed by drug violence in one day last week. This guy fell to his death catching a baseball in Texas as his six-year-old son looked on.

Why It's So Difficult to Recover (The Motley Fool)
The Motley Fool - It's hard to downplay how bad things were 10 years ago. The dot-com bubble burst, erasing $5 trillion of wealth faster than it was created. Decades of slowly eroding U.S. manufacturing jobs turned into a devastating burn. Enron and WorldCom collapsed amid fraud. And then 9/11 hit -- how does it get worse than that? What saps an economy is fear, and 9/11 produced lots of it. Not surprisingly, 2001, 2002, and 2003 saw far slower job growth than we've experienced over the past two years.

Partying Like It's 1995 (The Motley Fool)
The Motley Fool - "Pressure grew on Republicans to accept an increase in the nation's debt ceiling yesterday when a major Wall Street rating firm threatened to downgrade U.S. government securities," read one article.

S&P warns it may downgrade Fannie, Freddie credit (AP)
AP - Standard & Poor's is warning mortgage giants Fannie Me and Freddie Mac that they may lose their top credit ratings if lawmakers don't raise the U.S. government's borrowing limit in time to avoid a default.

S&P threatens downgrade of U.S. financial companies (Reuters)
Reuters - Standard & Poor's on Friday raised the pressure on debt negotiators in Washington, saying it could downgrade insurers, securities clearinghouses, mortgage agencies and a laundry list of other firms without a deal soon to lift the debt ceiling and cut the deficit.

Obama to name Cordray to consumer job (Reuters)
Reuters - President Barack Obama said on Sunday he will nominate former Ohio Attorney General Richard Cordray to head the new agency charged with protecting consumers from financial fraud and abusive practices on issues such as mortgage lending and credit card fees.

Schwab's income rises 16 percent in second quarter (AP)
AP - Discount broker Charles Schwab Co. said Monday that its second-quarter profit rose 16 percent as growth in its advisory business for individual investors offset a decline in trading revenue.

JPMorgan Chase overhauls troubled mortgage unit (Reuters)
Reuters - JPMorgan Chase & Co is putting on a kinder, gentler face as it overhauls a unit that negotiates with borrowers whose homes are headed into foreclosure.

How 'robo-signing' occurs in the mortgage industry (AP)
AP - The robo signing scandal virtually shut down the nation's entire foreclosure machine last fall. County officials in at least three states say the illegal practice continues. Here are some ways that robo signing can work:

AP Exclusive: Mortgage 'robo-signing' goes on (AP)
AP - Mortgage industry employees are still signing documents they haven't read and using fake signatures more than eight months after big banks and mortgage companies promised to stop the illegal practices that led to a nationwide halt of home foreclosures.

Special report: Banks continue robo-signing (Reuters)
Reuters - America's leading mortgage lenders vowed in March to end the dubious foreclosure practices that caused a bruising scandal last year.



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