subprime mortgages

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NY Subpoenas Wall Street Heavies in Subprime Probe

Cuomo looking into firms' risk assessment

(Newser) - Several high-profile Wall Street firms that packaged and sold subprime mortgages have been subpoenaed by New York prosecutors, the Wall Street Journal reports today. Merrill Lynch, Bear Stearns, and Deutsche Bank—among others—will be asked to explain how the offerings were reviewed before they were sold to investors, and...

Subprime Woes Afflict Good Credit Risks

Borrowers eligible for standard deals fell for risky loans

(Newser) - Borrowers with shady credit who never should have been allowed near a dotted line weren't the only ones swallowed by the subprime debacle—credit-worthy borrowers received 55% of all subprime loans in 2005, the apex of the subprime surge, reports the Wall Street Journal. Incentive-motivated mortgage brokers put many borrowers...

Mortgage-Rate Freeze Draws Backlash
Mortgage-Rate Freeze Draws Backlash
Dec 1, 2007 11:51 AM CST

Mortgage-Rate Freeze Draws Backlash

Plan to give borrowers a break called 'morally repugnant'

(Newser) - Not everyone is applauding Treasury Secretary Hank Paulson's plan to freeze adjustable mortgage rates on distressed home loans to help contain the spreading subprime crisis. Some analysts think the plan will only postpone foreclosures, rather than preventing them. And now that loans are bundled and sold to investors, some of...

Morgan Stanley Dumps Cruz Over Subprime

One of Wall Street's most powerful women is latest casualty

(Newser) - Morgan Stanley co-president Zoe Cruz has joined the ranks of subprime casualties, after the broker suffered $3.7 billion in mortgage-related losses in the first two months of the fourth quarter. Insiders said her leadership style and her 2005 backing of unpopular CEO Philip Purcell, who eventually was ousted, also...

Plan to Freeze Subprime Loans
Plan to Freeze Subprime Loans
Nov 30, 2007 3:12 AM CST

Plan to Freeze Subprime Loans

Treasury and lenders close to deal

(Newser) - The Treasury Department and a coalition of lenders are close to a deal to freeze interest rates on some subprime loans in a bid to bring the mushrooming mortgage crisis under control, reports the Wall Street Journal. A freeze would ease the burden on beleaguered borrowers and banks. Rates on...

Subprime Waves Ripple Across Europe
Subprime Waves Ripple Across Europe
Nov 29, 2007 1:59 PM CST

Subprime Waves Ripple Across Europe

Crises at German and Norwegian banks underscore exposure to US collapse

(Newser) - The ripples from the US subprime collapse continue to rock Europe as a group of German banks agreed to bail out troubled IKB Deutsche Industriebank, reeling from additional risk from US bond investments. Meanwhile, four Norwegian municipalities scrambled to recover after they they invested $156 million in now fading US...

Municipalities Feel Credit Market Pain

Unaffordable bonds mean projects stall— or taxes rise

(Newser) - Cities, towns, and schools are learning what would-be homeowners already know: the credit market stinks. Municipalities have grown addicted to financing projects with extremely low-interest bonds, but such cheap credit is hard to come by as bond insurers swing in the subprime wind, the Washington Post reports. Local governments either...

Banks Seeking Cash Spur New Merger Round

Citigroup blows off BoA for Abu Dhabi, but it's just the beginning

(Newser) - An informal merger overture from Bank of America to cash-starved Citigroup was recently rejected, the Wall Street Journal reports, in favor of a smaller, $7.5 billion infusion from the Abu Dhabi government, approved by the bank today. But the offer, quickly disavowed by BoA, underscores the fact that a...

The 'R-Word' Surfaces on Wall Street
The 'R-Word' Surfaces on Wall Street
Nov 27, 2007 12:38 PM CST

The 'R-Word' Surfaces on Wall Street

'Odds of a recession are pretty damn high,' says analyst

(Newser) - Wall Street has the recession jitters: Markets are down 10% since October, the S&P 500 is down as analysts predict depressed earnings, and T-bills are down on anticipated Fed rate cuts. But there’s a flip side: Holiday sales gained 8.3% over 2006, unemployment is at 4.7%,...

'08 Subprime Fallout: At Least 1.4M Foreclosures

Mortgage crisis slams economy across the board

(Newser) - The subprime mortgage fallout will continue through 2008, with 1.4 million Americans facing foreclosure, municipalities losing more than $6.6 billion in taxes, and housing values plummeting up to 16%, says a US Conference of Mayors report out today. The analysis projects slowed GDP growth and consumer spending and...

Abu Dhabi Bails Out Citigroup With $7.5B Deal

Cash infusion for 4.9% stake will make it Citi's largest shareholder

(Newser) - Staggered by the weight of subprime mortgage losses and with its stock trading at its lowest level since 2002, embattled Citigroup last night announced a $7.5 billion cash infusion from the government of Abu Dhabi, the Wall Street Journal reports. The deal strengthens Citi’s capital base and investor...

Citigroup Faces Pressure to Help Troubled Borrowers

Fallout mounts from $45B mortgage portfolio

(Newser) - The subprime collapse has Citigroup beset on two sides: Besides dealing with a $45 billion portfolio of 280,000 subprime mortgages it acquired in September, Citi is facing pressure from influential consumer advocacy groups to provide relief to troubled borrowers, the Journal reports. Activists are calling for the lender to...

Small Hedge Fund Scores 1,000% Return

Shorting subprime securities may be most profitable bet of all time

(Newser) - A small Californian hedge fund bet against subprime-linked securities and earned its investors a cool 1,000% profit this year, making Lahde Capital one of the world's best-performing funds of all times, the Financial Times reports. In all, hedge funds that shorted subprime loans appear to have made the single...

Subprime Nightmare to Get Worse
Subprime Nightmare to Get Worse
Nov 24, 2007 2:28 PM CST

Subprime Nightmare to Get Worse

With rates about to reset higher, expect more foreclosures

(Newser) - The subprime mortgage crisis is only just beginning, new data suggests. Hundreds of billions of dollars in subprime adjustable-rate mortgages are due to reset to higher rates in the year ahead, reports the Wall Street Journal. Analysts say this means the steep rise in defaults and foreclosures this year may...

Greenspan Has 'No Particular Regrets'

Former FED chair calls housing crisis 'a global phenomenon'

(Newser) - The US housing market crisis is not the result of Federal Reserve policies but part of a global phenomenon, former Fed chair Alan Greenspan says. "I have no particular regrets," he said yesterday in Oslo. "The housing bubble is not a reflection of what we did, as...

$1.5B Bailout Gives Hope to Reeling Bond Insurers

(Newser) - A quiet infusion of $1.5 billion from two European banks will help bond insurer CIFG maintain its AAA credit rating, the Wall Street Journal reports. The move keeps at bay a crisis in the bond market that could cost investors $200 billion and might provide a bailout blueprint for...

Arnie Teams With 4 Lenders to Hold Off Foreclosures

Governator brokers deal to keep subprime mortgage at inital rates

(Newser) - Four big lenders in California have agreed to extend low-interest mortgage rates to homeowners on the brink of foreclosure, the San Francisco Chronicle reports. The lenders worked with Gov. Schwarzenegger on the deal, which will apply to subprime borrowers who have made payments on time so far but will be...

Subprime Woes Hit New York Law Firms
Subprime Woes Hit New York Law Firms
Nov 21, 2007 10:52 AM CST

Subprime Woes Hit New York Law Firms

For the first time since 2001, lawyers are being let go

(Newser) - The continuing mortgage crisis and tightening credit markets are claiming a new batch of victims: Lawyers. Layoffs at Clifford Chance, the world's highest-grossing law firm, have started, Bloomberg reports, and up to 5% of salaried associated at New York law firms may get the ax as work on mergers, acquisitions...

Freddie Mac Loses $2B, Seeks Cash
Freddie Mac Loses $2B, Seeks Cash
Nov 20, 2007 8:51 AM CST

Freddie Mac Loses $2B, Seeks Cash

No. 2 mortgage lender's capital is close to regulatory minimum

(Newser) - Freddie Mac, the second-largest US mortgage lender, lost $2.02 billion this quarter, its worst quarter ever, the company said this morning. With core capital almost below its regulatory minimum, the company is looking for fast cash, hiring Goldman Sachs and Lehman Brothers to help bail it out, and “...

Northern Rock Plummets 40% as Britain Seeks Buyer

Bank crisis spells political trouble

(Newser) - In Britain the meltdown of Northern Rock has expanded into a full-out political crisis. The bank's stock plummeted 40% this morning to trade at less than a dollar a share, the Financial Times reports. The collapse of Northern Rock spells serious trouble for Alistair Darling, the chancellor, who is desperate...

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