subprime mortgages

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Bank of America Takes 32% Third-Quarter Dive

Investment division, big write downs, sink quarter

(Newser) - Bank of America today reported a whopping 32% drop in third-quarter net income, thanks to steep trading losses, write-downs to cover loan defaults, and larger set-asides to cover credit losses. Unlike many competitors, the nation's second-largest bank hadn’t issued loss guidance.

Paulson: Economy in Danger
Paulson: Economy in Danger
Oct 16, 2007 12:40 PM CDT

Paulson: Economy in Danger

(Newser) - The ongoing housing implosion poses “a significant risk” to the economy, Treasury Secretary Henry Paulson said in a speech at Georgetown University today, in a sobering about-face from earlier attempts to downplay the crisis. “The ongoing housing correction is not ending as quickly as it appeared,” he...

Housing Still a Drag: Fed Chief
Housing Still a Drag: Fed Chief
Oct 16, 2007 5:38 AM CDT

Housing Still a Drag: Fed Chief

Setbacks likely, says Bernanke, who offers no hints on interest rate status

(Newser) - The real estate slump will continue to be a "significant drag" on US economic growth well into next year, said Federal Reserve Chairman Ben Bernanke in his first speech on the economy since August. Recovery from the credit crisis will take time, and setbacks are likely, Bernanke told the...

Banks to Form $100B Fund to Back Mortgage Securities

Critics say plan is unnecessary, only helps Citigroup

(Newser) - Citigroup and other major banks are banding together to create a $100-billion fund to buy back shaky mortgage securities in order to contain the threat of their undermining the markets and hurting the economy. The unprecedented project, pooling money from banks like JP Morgan and Bank of America, has been...

Subprime Loans Went to Rich as Well as Poor

High-rate mortgages accounted for 29% of all home loans last year

(Newser) - Crunching the numbers on 130 million home loans over the past decade, the Wall Street Journal finds that risky, high-interest loans were extended far beyond the low-income urban borrowers they are usually associated with. Last year, they accounted for 29% of all home loans, up from 16% in 2004. As...

Housing Slump Dampens '08 Prospects
Housing Slump Dampens '08 Prospects
Oct 10, 2007 12:38 PM CDT

Housing Slump Dampens '08 Prospects

Economists cut growth forecast; still predict better rate than '07

(Newser) - Economists cut projections for 2008 growth for a third consecutive month, Reuters reports, signaling the fallout from mortgage woes will be widespread and prolonged. A survey of 52 experts estimated the economy would expand 2.4% next year; they’d predicted 2.6% growth last month and 2.8% the...

Dow Breaks 14,000 for 2nd Time
Dow Breaks 14,000 for 2nd Time
Oct 1, 2007 3:53 PM CDT

Dow Breaks 14,000 for 2nd Time

New clarity takes steam out of doomsday scenario

(Newser) - Citigroup and UBS warned of steep third quarter declines today, and the Dow responded by jumping 191.92 points—reacting to new clarity in an uncertain market, the Wall Street Journal reports. The index hit an intraday record—14,091.53—before closing at 14,087.55, only the second...

Citigroup Earnings Plunge 60% on Subprime Woes

Company will be latest victim of market turmoil when it reports

(Newser) - Citigroup is the latest big-name victim of the subprime crash, the company announced today, warning of a 60% third-quarter earnings drop. Full earnings will be out Oct. 15, but it appears net income will drop to $2.2 billion from the $5.51 billion reported last year. “Our expected...

Swiss Bank Giant Posts Huge Losses Amid Credit Crisis

Biggest loser so far in subprime mess

(Newser) - Switzerland's largest bank, UBS, has become the biggest casualty of the worldwide turmoil in the financial markets, reports the Wall Street Journal. The bank is expected to announced today that it has written off  $3.4 billion in fixed income assets. UBS is projecting third quarter losses of at least...

August Home Price Plunge Is Biggest Since 1970

New-home sales also off more than forecast

(Newser) - New-home sales fell 8.3% in August, Bloomberg reports, a greater decline than predicted. Housing prices fell over last year, with the 7.5% decrease the biggest drop since 1970. Sales fell to an annual pace of 795,000, lowest in seven years. And that may not signal the housing...

Largest US Homebuilder Posts Biggest Losses Ever

Lennar stock drops after worse-than-expected earnings report

(Newser) - The atrophied housing market has sent America’s largest homebuilder into even more of tailspin than expected. Lennar announced today it lost $513.9 million last quarter, or $3.25 per share—the worst losses in its 53-year history. Lennar says home discounting and the dismal mortgage situation will force...

Bernanke Sees More Housing Pain, ‘Relatively Strong’ System

Foreclosures continue, but market OK overall

(Newser) - Federal Reserve chairman Ben Bernanke went before Congress today, two days after trimming the benchmark lending rate, and said new foreclosures will come as more subprime mortgages run out clocks on initial interest rates. Markets “do tend to self-correct” in crises, the economic guru said, and the global system...

British Bank Rebounds as Panic Wears Off

Financial stocks see gains on Northern Rock guarantees

(Newser) - As the lines of people waiting to make withdrawals from Northern Rock bank dwindled today, the British lender’s stock rose, bringing with it other hard-hit British financials. Northern Rock's huge losses in the mortgage market sparked a sell-off, drawing emergency funds from the Bank of England. But the government's...

Home Foreclosures Hit Record
Home Foreclosures Hit Record
Sep 18, 2007 12:14 PM CDT

Home Foreclosures Hit Record

August numbers double, with no end in sight

(Newser) - Another 108,716 American homeowners received foreclosure notices in August, a record total more than double last year’s figure. And this is only the beginning, say analysts, who expect even more subprime borrowers to default over the next 2 years. That will further depress housing prices, which are expected...

Asian Markets in Sharp Slide
Asian Markets in Sharp Slide
Sep 18, 2007 6:02 AM CDT

Asian Markets in Sharp Slide

(Newser) - Asian stocks fell yet again today as the subprime mortgage crisis continued to reverberate across global markets. The latest dip came when E*Trade Financial Corp and Bank of America announced the credit crisis was hurting earnings, Bloomberg reports. The biggest fear is that the rising cost of credit will halt...

Brits Panic Over Credit Crisis
Brits Panic Over Credit Crisis
Sep 16, 2007 11:17 AM CDT

Brits Panic Over Credit Crisis

UK is extra vulnerable to the credit crunch

(Newser) - The US credit crisis is sending Britain's buy-now-pay-later economy into apoplexy, with Brits lining up by the thousands outside branches of troubled bank Northern Rock to withdraw their savings in spite of an unprecedented government bailout. Analysts say that the nation's borrowing habits leave the economy vulnerable. "I think...

Investors Might Reap Rewards of Dollar's Slide

Currency's record lows against euro cause "to cheer," analyst says

(Newser) - The dollar may be continuing its slow, steady decline against the euro, but many analysts are looking on the bright side, Business Week reports. American stocks, companies, investors, and workers can all benefit from the decreasing value of their currency, economists say, with one calling the dollar’s decline “...

Greenspan Missed Subprime Crisis Signs

And Bernanke's doing 'an excellent job,' says Fed's former Yoda

(Newser) - Alan Greenspan didn't see the subprime crunch coming, the former Fed chairman tells CBS' "60 Minutes." Greenspan also gave his successor a pat on the back, saying Ben Bernanke "is doing an excellent job." Some have suggested that Bernanke isn't acting as presciently as his predecessor;...

Demand for Mortgages Rises as Rates Fall

Interest charge lowest since May, with Fed likely to cut further

(Newser) - Applications for home loans increased for the second week in a row as interest rates on both fixed and adjustable-rate mortgages fell, according to a survey by the Mortgage Banker's Association. Indices tracking applications for both purchases and refinancing showed a 5.5% increase over last week and a 12....

Subprime Crisis Sparks a Spate of Legal Battles

Investors, homeowners, banks head to court, but obstacles lie ahead

(Newser) - The troubles plaguing Countrywide and Bear Stearns’ hedge funds will move from the boardroom to the courtroom. Homeowners and banks are suing mortgage lenders, shareholders are suing funds, the SEC is investigating executives, and Congress may conduct hearings into credit agencies' practices. The current mess ensnares “an incredible range...

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