| Credit crunch threatens economy
Five months ago, Federal Reserve Chairman Ben S. Bernanke shrugged aside the global financial turbulence caused by risky subprime loans and pronounced himself more concerned with inflation than credit markets. But this week after a worldwide stock market rout and gloomy spending and unemployment data, Bernanke waded into the subprime mortgage mess and offered an emergency rescue package to the banks and the credit markets where the world's growing economic unease began. Just days after Washington floated the idea of tax rebates, the Fed, motivated in part by big losses in the stock market, hastily cut its benchmark interest rate in an attempt to help banks strengthen their balance sheets -- a move authorities hoped would ultimately blunt the impending economic slowdown.
Reviewer of Subprime Loans to Aid Inquiry
A company that analyzed the quality of thousands of home loans for investment banks has agreed to provide evidence to New York state prosecutors that the banks had detailed information about the risks posed by ill-fated subprime mortgages. Investigators are looking at whether that information, which could have prevented the collapse of securities backed by those loans, was deliberately withheld from investors. Clayton Holdings, a company based in Connecticut that vetted home loans for many investment banks, has agreed to provide important documents and the testimony of its officials to the New York attorney general, Andrew M. Cuomo, in exchange for immunity from civil and criminal prosecution in the state. The agreement, which was confirmed by Mr.
Nehemiah Corporation of America Reaches $1 Billion Milestone in ...
SACRAMENTO, Calif., Jan. 24 /PRNewswire-USNewswire/ -- Nehemiah Corporation of America, the oldest and largest provider of private downpayment assistance in the United States, today announced that the non-profit has provided more than $1 billion in mortgage downpayment assistance through The Nehemiah Program(R). Initiated in 1997, The Nehemiah Program(R) has helped over 250,000 minority and low to moderate income families become homeowners to date. The Program reported substantial growth in 2007 as banks and mortgage lenders abandoned risky products once promoted to low and moderate income families and returned to the stability and affordability of mortgage products offered in conjunction with FHA loan insurance. The Nehemiah Program provides private downpayment assistance to homebuyers who qualify for FHA-insured mortgages but are not able to make the downpayment necessary to secure the mortgage.
Local Financial Services Industry Laying Off By The Hundreds
Financial services, a growth industry for the local economy in recent years, has been cutting staff at a faster rate this year as the upheaval in the mortgage-lending sector continues. On top of cuts inflicted at mortgage banks and brokerages, the student loan industry is cutting staff in reaction to changes in the federal subsidies granted to private lenders. Through the end of September, 1,500 jobs have been pared from the payrolls of San Diego financial services employers over the previous 12 months, according to the most recent report from the state Employment Development Department. Most are related to the national slowdown in the housing market. For example, Accredited Home Lenders Holding Co. cut about three-fourths of its staff starting this year, to 1,000 from 4,000 at the end of last year.
IV. Human Rights Abuses and the War on Drugs
We still have to pay money back to banks, mortgage companies and loan sharks for her until today. If the police come to confiscate our belongings, we will have nothing left to survive. The daughter was worried about having her possessions confiscated, because it was common during the war on drugs for those killed or arrested to have their money and properties confiscated in a broad interpretation of Thailands anti-money laundering law. To date, no one has been arrested for the death of Somjit, and there is no sign that any serious investigation has ever been conducted. Case Study: The killings of Sia-Jua Sae Thao, Somchai Sae Thao, Bunma Sae Thao, and Saeng Sae Thao On February 12, 2003, just after noon, on the route to Wat Dhama Kaya Temple, Ban Neun Village, in Lom Kao District, Petchaborn Province (about fourteen kilometers from the victims village), four men were murdered as part of the war on drugs.
Banks hope cut eventually lifts demand for loans
The bad: Short-term pressures will remain. Banks have already been socked hard by the mortgage crisis and quarter after quarter of asset write-downs as investors try to figure out what banks' loan portfolios are really worth. And the cost of getting deposits — what banks pay in interest on savings, checking and certificate of deposit accounts — will remain higher than what they can charge on loans in the immediate future. For some banks, the rate cut means that they will lower their prime rates in tandem — SunTrust Banks did so Tuesday — but they won't be able to cut deposit rates as quickly because of competition for those deposits. The ugly: Consumer confidence is a wild card for the economy and for banks. If the Fed cuts don't ease consumer concerns, economic growth would be stifled, and there would little new demand for loans.
ALL BUSINESS: Banks face more woes from rising delinquencies on second ...
Contrarian investors who think now is the time to start buying beaten-down banking stocks could be in for a shock if they don't carefully review those companies' distressed home-equity loan portfolios. Massive losses tied to subprime-mortgage investments knocked down bank earnings over the last year, spurring investors to flee those stocks. But that could be only the start: Rising delinquencies in home-equity loans and other second mortgages could keep the banks' results from improving anytime soon. In recent days, executives at Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. said missed loan payments were a factor in their quarterly earnings declines. Most said the problem would only get worse. Why? A so-far small, but growing, number of homeowners who used their homes like an ATM to fund their spending and investment bets are finding themselves in a financial pinch.
Obama's backyard economics session
Barack Obama sat in registered nurse Mimi Vitello's sunny backyard in Van Nuys and listened as she and three other local voters talked about their worries over home loans and credit card debt. The presidential hopeful listened intently and said the mortgage and credit card industries were skewed against working Americans.
"The deck has been stacked in favor of the big banks and the big financial companies and not for the consumers and homeowners," he told the residents.
They sat around a table outside Vitello's modest home, which she bought with an interest-only loan. Now that loan worries her. "My income is not going to jump ahead, and here comes my interest-only [payment hikes] in a couple years," Vitello said.
Obama noted that foreclosures could cost California's economy $23 billion, and he blamed the federal government for not regulating lenders.
The Subprime Meltdown and SRI: Engage, Avoid, Predict
Shareowner activists engaged banks on predatory lending long before the subprime crisis climaxed, and SRI research predicted the meltdown in time to avoid some impacts. SocialFunds.com -- The subprime market meltdown: you could see it coming for miles--if you were wearing the right colored glasses. Socially responsible investing (SRI) is one such set of lenses. Shareowner activists began engaging banks on predatory lending years before regulators started noticing (but not acting on) red flags in the subprime market in late 2003--the beginning of chronology of neglect according to Senate Banking, Housing, and Urban Affairs Committee Chair Chris Dodd (D-CT).
Some SRI funds avoided the worst impacts of the meltdown by excluding mortgage-backed securities containing predatory loans.
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