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BUSINESS
February 13, 2008 | From Times Staff and Wire Reports
Big investment banks that played a role in the sub-prime mortgage crisis by funding the loans and selling them as securities should be required to invest in local communities, a U.S. financial regulator says. John Dugan, head of the U.S. Office of Comptroller of the Currency, said in remarks prepared for delivery to an affordable-housing group that expanding the Community Reinvestment Act to include big investment banks could add billions of dollars to local areas. "These nonbanks, having played such a large role in the sub-prime mortgages that have caused such problems in communities nationwide" have no incentive to address those problems because they aren't covered by the act, Dugan said.
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BUSINESS
December 13, 2013 | By David G. Savage
WASHINGTON - The U.S. Supreme Court said Friday that it would decide whether employees who suffer big losses in retirement accounts can sue their company if it encouraged them to invest in the company's shaky stock. The justices will try to clarify who is legally responsible for investment losses in an era when most workers manage their own retirement accounts but do it through a plan sponsored by their employer. Federal law says that administrators of an employee retirement fund have a duty to act as "prudent" trustees.
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BUSINESS
May 13, 2008
Bond insurer MBIA Inc. posted a quarterly loss of $2.4 billion as it took charges on billions of dollars of exposure to bonds linked to sub-prime mortgages. But MBIA's beaten-down shares rose more than 4% as adjusted results beat expectations and the company said new business volumes appeared to be rising from the first quarter. The charges announced Monday wiped out 40% of MBIA's net worth, but MBIA said most of the changes it recorded in the value of its exposure would not translate to actual payouts on insurance.
BUSINESS
September 25, 2008 | Jim Puzzanghera, Times Staff Writer
Lawmakers, housing advocates and both presidential candidates are demanding that any bailout for financiers on Wall Street needs to help homeowners on Main Street too. But it's easier said than done. The main proposals for helping struggling homeowners call for allowing the federal government to restructure mortgages it would buy under the Bush administration's $700-billion bailout plan, and to give bankruptcy judges new powers to force lenders to accept revised home loans.
BUSINESS
September 22, 2007 | From Reuters
Loan service companies did little to help sub-prime borrowers with adjustable-rate mortgages stay in their homes, even as it became clear many homeowners were struggling to keep up with their payments, a study released Friday showed. Moody's Investors Service said banks eased borrowing terms on just 1% of sub-prime mortgages with interest rates that reset higher in January, April and July.
BUSINESS
May 7, 2008 | From Times Wire Services
Ambac Financial Group Inc., the world's second-largest bond insurer, has backed eight new issues in the municipal bond market since it raised capital to safeguard its credit ratings. The company said it insured a $46.8-million lease financing deal for the city of Compton and a $62-million Alaska Municipal Bond Bank issue. Ambac, and competitors such as MBIA Inc., stumbled after expanding from backing debt issued by cities and states, which rarely default, to insuring securities backed by sub-prime mortgages.
BUSINESS
June 29, 2007 | From Times Wire Services
Five federal agencies that regulate banks have agreed on new standards for sub-prime mortgages and are expected to release them today, several people familiar with the standards said Thursday. The standards will largely resemble a draft version released in March, the sources said. The draft calls on lenders to assess a "borrower's ability to repay the debt by its final maturity at the fully indexed rate."
BUSINESS
July 12, 2007 | From Times Wire Services
Fremont General Corp., which made thousands of sub-prime loans in Massachusetts, will stop foreclosure proceedings in the state to give officials time to review all transactions, the state said Wednesday. Martha Coakley, Massachusetts' attorney general, said her office had reached a preliminary agreement in which the Santa Monica-based lender would stop foreclosures on more than 2,000 Massachusetts loans that the company services.
BUSINESS
July 11, 2007 | From Times Staff and Wire Reports
Two major bond-rating firms, which critics say responded too slowly to the sub-prime mortgage meltdown, said Tuesday that they were cutting ratings or considering downgrades on billions of dollars in debt backed by risky home loans. Standard & Poor's and Moody's Investors Service said they made the moves because homeowners were missing payments on sub-prime mortgages at much higher levels than anticipated. The firms blamed lenient lending standards during the housing run-up.
BUSINESS
April 5, 2007 | From Reuters
Problems in the sub-prime mortgage market have not spread but are clouding the outlook for housing and the U.S. economy as a whole, Federal Reserve Bank of Dallas President Richard Fisher said Wednesday. "Thus far, the damage from the sub-prime market has been largely contained. ... Quality problems have arisen primarily for adjustable-rate sub-prime loans, which are only about 8.5% of home-mortgage debt outstanding," he told the Austin Mortgage Bankers Assn.
BUSINESS
August 8, 2008 | Annette Haddad, Times Staff Writer
One of the biggest construction workers unions on Thursday warned of more housing problems ahead -- particularly for borrowers living in new-home communities -- and lays much of the blame on the nation's home builders. Homeowners who purchased at newer developments are more likely to have 100%-financed, adjustable-rate mortgages because of builders' efforts to push risky subprime loans, according to a report from the Laborers' International Union of North America.
BUSINESS
July 15, 2008 | Maura Reynolds and Walter Hamilton, Times Staff Writers
The Federal Reserve clamped down hard on mortgage lenders Monday, issuing rules designed to curb the sorts of risky and deceptive lending practices that helped trigger the subprime mortgage crisis. The Fed's action, although criticized by some for not going far enough, was widely seen as a crucial step in reasserting control over a financial market that had been allowed to run wild. "There's lots more to come," said Thomas Lawler, a former Fed official who is now a housing market consultant.
BUSINESS
June 19, 2008 | Marc Lifsher, Times Staff Writer
A key Senate committee Wednesday killed or greatly watered down a series of Assembly bills that would have imposed new regulations on sub-prime mortgages in an attempt to curb the worst wave of foreclosures since the Great Depression. The measures, part of a package launched with fanfare last winter by the Assembly leadership, sought to protect Californians from getting stuck with loans they couldn't afford and didn't understand. Sen.
BUSINESS
June 12, 2008 | From Bloomberg News
The Federal Bureau of Investigation has ordered more than two dozen of its field offices to stop probing some financial crimes to focus on a surge in sub-prime mortgage fraud. Kenneth Kaiser, chief of the bureau's criminal investigative division, issued the directive late last week in a video conference call with the heads of 26 offices in areas where mortgage crime is rampant, said Bill Carter, an FBI spokesman in Washington.
BUSINESS
May 13, 2008
Bond insurer MBIA Inc. posted a quarterly loss of $2.4 billion as it took charges on billions of dollars of exposure to bonds linked to sub-prime mortgages. But MBIA's beaten-down shares rose more than 4% as adjusted results beat expectations and the company said new business volumes appeared to be rising from the first quarter. The charges announced Monday wiped out 40% of MBIA's net worth, but MBIA said most of the changes it recorded in the value of its exposure would not translate to actual payouts on insurance.
BUSINESS
May 7, 2008 | From Times Wire Services
Ambac Financial Group Inc., the world's second-largest bond insurer, has backed eight new issues in the municipal bond market since it raised capital to safeguard its credit ratings. The company said it insured a $46.8-million lease financing deal for the city of Compton and a $62-million Alaska Municipal Bond Bank issue. Ambac, and competitors such as MBIA Inc., stumbled after expanding from backing debt issued by cities and states, which rarely default, to insuring securities backed by sub-prime mortgages.
BUSINESS
January 29, 2008 | From Times Wire Services
Defaults on U.S. sub-prime mortgages continued their relentless climb in December as some borrowers faced rising payments on adjustable loans, according to Wachovia Corp. A team of analysts at Wachovia said 28.1% of loan balances backing 20 sub-prime bonds created in the first half of 2006 were in default, up 2.43 percentage points from the previous month. That increase compares with a jump of 2.25 percentage points in November. "It is increasingly difficult to find new synonyms for the word 'increase' to describe the direction of nonperforming loans," the analysts wrote in a report dated Friday.
BUSINESS
February 14, 2008 | From Times Wire Services
U.S. financial regulators will propose changes in the rules for packaging loans into bonds in the aftermath of the sub-prime credit collapse, Treasury Secretary Henry M. Paulson Jr. said. It will be a number of months before a presidential working group that is considering the issue makes its recommendations, Paulson told Bloomberg Television. The group, which includes the heads of the Treasury, Federal Reserve, Securities and Exchange Commission and Commodity Futures Trading Commission, has yet to reach conclusions, he said.
BUSINESS
April 29, 2008 | From Times Wire Services
U.S. municipal borrowers pushed down yields on auction-rate bonds to the lowest in 11 weeks by moving to eliminate at least $56.5 billion, or 34%, of the debt they had in the market. Local governments disclosed plans to redeem about 150 tax-exempt auction issues totaling $8.3 billion last week, according to investment bank Siebert Brandford Shank & Co. That's the most since the $166-billion municipal auction market began falling apart in February, the firm said. States, cities and hospitals are replacing the securities and bidding for their own bonds at auctions that set yields to cut interest costs that rose as high as 20%. The average rate on bonds reset weekly fell 2.55 percentage points to 4.34% from a record 6.89% on Feb. 20, a Securities Industry and Financial Markets Assn.
NATIONAL
April 11, 2008 | Maeve Reston, Times Staff Writer
Amid widespread concerns about the nation's mortgage crisis, John McCain outlined Thursday a proposal to help "well-meaning, deserving homeowners who are facing foreclosure" and called for a Justice Department investigation into possible "criminal wrongdoing" by unscrupulous lenders. The proposals marked a shift in tone from McCain's admonition two weeks ago against adopting a mortgage plan that would be "a multibillion-dollar bailout for big banks and speculators."
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