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BUSINESS
April 27, 2013 | By E. Scott Reckard, Los Angeles Times
Michele and Russell Poland's credit was shot, but they managed to buy their suburban dream home anyway. After a business bankruptcy and a home foreclosure, they turned to a rare option in this era of tightfisted banking - a subprime loan. The Polands paid nearly $10,000 in upfront fees for the privilege of securing a mortgage at 10.9% interest. And they had to raid their retirement account for a 35% down payment. Most borrowers would balk at such stiff terms. But with prices rising, the Polands wanted to snag a four-bedroom home in Temecula near top-rated schools for their 5-year-old son. By later this year, they figure, they'll be able to refinance into a standard loan.
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OPINION
December 10, 2013 | By The Times editorial board
Federal regulators are expected to give final approval this week to the so-called Volcker Rule, which bars banks from making risky investments with the insured deposits they're holding for customers. To protect against having to bail out depositors in the event of a giant bank failure, it makes sense to set clear limits on what banks can do with the assets that the federal government guarantees. But the contention surrounding the Volcker Rule illustrates how hard it is for regulators to translate simple concepts into real and effective rules.
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CALIFORNIA | LOCAL
March 18, 2008 | By E. Scott Reckard, Los Angeles Times Staff Writer
Billionaire Roland E. Arnall, whose widespread philanthropy and extraordinary political friendships stood in contrast to repeated investigations into alleged lending abuses at his giant subprime company, Ameriquest Mortgage Co., died Monday. The longtime Holmby Hills resident was 68. Arnall, a Holocaust survivor who co-founded the Simon Wiesenthal Center, had resigned as President Bush's ambassador to the Netherlands on March 7, returning to Los Angeles to be with a seriously ill son, the family said.
BUSINESS
August 7, 2013 | By E. Scott Reckard
JPMorgan Chase & Co. disclosed that it may become the latest giant bank to face a Justice Department lawsuit over bonds backed by housing-boom loans, and said a parallel criminal investigation is continuing.  Federal prosecutors believe that JPMorgan Chase, the nation's largest bank, violated securities law in its sale of bonds backed by subprime and other high-risk mortgages, the bank said Wednesday in a Securities and Exchange Commission filing....
BUSINESS
July 14, 2013 | By Ken Bensinger
Consumer Portfolio Services Inc. operates on a simple principle: Everyone needs a car. For more than two decades, the Irvine subprime auto lender, known as CPS, has helped finance vehicles for people who have less than perfect credit. Employing a network of more than 5,000 new- and used-car dealerships around the country, the company buys up loans after they're originated, then bundles them with thousands of other loans. The package of auto notes is rated by credit agencies, cut into pieces as securities and sold to investors.
BUSINESS
April 8, 2010 | By Jim Puzzanghera
The federal commission probing the financial crisis took aim at the causes of the subprime mortgage meltdown, but former Federal Reserve Chairman Alan Greenspan said Wednesday that it shouldn't point at him. Summoned to address sharp criticism that the Fed failed to stop the housing bubble and the risky mortgages that helped pop it, Greenspan strongly defended his actions and warned that regulators alone couldn't stop financial crises. The best prevention, he said, would come from increasing requirements on banks and other financial institutions to have more money and collateral to carry them through rough times.
BUSINESS
July 13, 2008
I take exception to the claim that it's difficult to figure out how "it happened or exactly who's to blame" for the refinancing problems illustrated by Vicki Miller in "Refinancing spurred subprime crisis," (The Mortgage Meltdown, July 5). Here you have a person making $26,000 a year, with less than $17,000 in take-home pay, increasing her primary mortgage by $28,000, next taking out a second mortgage of $13,000 and then borrowing an additional $5,000 for energy efficient windows. Regardless of the questionable loan disclosures and sales practices, the fundamental issue is that people somehow believe that money falls from the arms of lenders without any connection to their ability to repay it. Wake up people.
BUSINESS
July 8, 2010 | By E. Scott Reckard and Kristena Hansen, Los Angeles Times
Banking giant Wells Fargo & Co. is closing its 638 subprime lending offices that operated nationwide to supply higher-cost mortgages, auto loans and credit cards in lower-income neighborhoods. About 3,800 employees will lose their jobs as the company shutters its Wells Fargo Financial subsidiary. Of the storefront offices to be closed, 74 are in California, said David Kvamme, president of the subprime unit. "We know that this decision will be extremely difficult for those dedicated team members and their families who will be affected," Kvamme said.
BUSINESS
September 15, 2008 | E. Scott Reckard
Lehman Bros. was an early and enthusiastic backer of subprime lending. It purchased the mortgages and used pools of the loans to back complex bonds, many of which were sold overseas. Merrill Lynch came onto the scene later. After the late-1990s meltdown in the subprime securitization business, Lehman stepped in with funds and other services that enabled First Alliance of Irvine to continue business in 1999 and 2000 despite lawsuits filed by state attorneys general, consumer groups and AARP.
BUSINESS
May 6, 2009 | Tom Hamburger and Ralph Vartabedian
The major banks now collecting federal bailout money were not unwitting victims of the mortgage meltdown but instead were directly linked to the root cause of the problem: a subprime lending machine concentrated in Southern California, a new study asserts. The banks were "enablers that bankrolled the type of lending threatening the international financial system," according to the study being released today by the Center for Public Integrity, a Washington-based watchdog group.
BUSINESS
July 14, 2013 | By Ken Bensinger
Consumer Portfolio Services Inc. operates on a simple principle: Everyone needs a car. For more than two decades, the Irvine subprime auto lender, known as CPS, has helped finance vehicles for people who have less than perfect credit. Employing a network of more than 5,000 new- and used-car dealerships around the country, the company buys up loans after they're originated, then bundles them with thousands of other loans. The package of auto notes is rated by credit agencies, cut into pieces as securities and sold to investors.
SCIENCE
June 24, 2013 | By Karen Kaplan
Can you figure out how much a $300 sofa would cost during a half-price sale? If five people share the winning numbers for a lottery with a $2-million prize, can you calculate how much money will wind up in each winner's pocket? If questions like these leave you flummoxed, economists have some advice: Do not get a subprime mortgage. After analyzing the payment history on 339 subprime loans and measuring the “numerical ability” of those borrowers, the economists determined that people who have the most trouble with math were most likely to fall behind on their mortgages . They were also most likely to have the bank start foreclosing on their homes, according to a study published Monday in Proceedings of the National Academy of Sciences.
BUSINESS
April 27, 2013 | By E. Scott Reckard, Los Angeles Times
Michele and Russell Poland's credit was shot, but they managed to buy their suburban dream home anyway. After a business bankruptcy and a home foreclosure, they turned to a rare option in this era of tightfisted banking - a subprime loan. The Polands paid nearly $10,000 in upfront fees for the privilege of securing a mortgage at 10.9% interest. And they had to raid their retirement account for a 35% down payment. Most borrowers would balk at such stiff terms. But with prices rising, the Polands wanted to snag a four-bedroom home in Temecula near top-rated schools for their 5-year-old son. By later this year, they figure, they'll be able to refinance into a standard loan.
BUSINESS
January 29, 2013 | E. Scott Reckard
With home prices rising, interest rates falling and builders building, some prominent housing advocates are calling for a new kind of loan for buyers with lower incomes or bad credit. They'd like to call it the Dignity Mortgage, but it has another name -- one that's become more of an epithet since the housing crash: subprime. Applicants might include people caught in the early stages of the mortgage meltdown who have since rebuilt their finances, said Faith Bautista, who heads the National Asian American Coalition.
BUSINESS
January 14, 2013 | By E. Scott Reckard
As the mortgage market collapsed in 2007, bond trader Kareem Serageldin had a tricky job - placing a value on more than $3 billion in toxic mortgage securities decaying on the books of Credit Suisse, the giant Swiss bank. On Monday, a British court approved Serageldin's extradition to New York to face criminal charges that he inflated the bonds' value by $540 million to impress his bosses, angling for millions of dollars in year-end bonuses and a shot at a big promotion. Serageldin, a U.S. citizen living in London, had been granted $7.3 million in compensation for 2007 before Credit Suisse learned of the alleged scheme and withheld $5.2 million of the pay. In a rare criminal prosecution of Wall Street stemming from the financial crisis, the former global head of structured credit for Credit Suisse was indicted last February on conspiracy and fraud charges.
BUSINESS
October 23, 2012 | By E. Scott Reckard, Los Angeles Times
The pace of foreclosures in California is the lowest in five years, and lenders are doing more to modify troubled home loans than ever before. But in South Gate, where Ana Casas Wilson lives with her husband, James, and her mother, Rebecca, the complex legacy of the subprime lending boom lingers and the harsh lessons for lenders and borrowers remain fresh. Casas Wilson, 50, now nearly bedridden with terminal breast cancer and cerebral palsy, has lived in the 86-year-old house for 40 years, but the Wilsons haven't made a mortgage payment since July 2008.
BUSINESS
July 29, 2011 | By Walter Hamilton and Stuart Pfeifer, Los Angeles Times
The subprime litigation nightmare that Bank of America Corp. inherited with its acquisition of Countrywide Financial Corp. was compounded Thursday when 16 investors — including the giant California Public Employees' Retirement System — brought a new lawsuit alleging that Countrywide misled them about the risks it was taking. The suit filed in federal court in Los Angeles is a setback for Bank of America, which has sought to put the subprime morass behind it by striking settlements with a range of securities holders.
BUSINESS
February 2, 2010 | By Tom Petruno
In the heyday of the securitization industry, when subprime mortgages could be magically transformed into AAA-rated bonds, the Wall Street alchemists who created that trillion-dollar business held their annual convention in the city that fully appreciated the idea of image over substance: Las Vegas. But this year, more than two years into the securitization market's collapse, the industry's annual confab has moved from Vegas' opulent Venetian Resort to a much less glitzy locale: the Gaylord National Hotel, just outside Washington in National Harbor, Md. More than 4,000 people were expected to attend the American Securitization Forum's convention, which officially kicked off Monday.
BUSINESS
July 13, 2012 | By E. Scott Reckard, Los Angeles Times
Wells Fargo & Co.'s settlement of allegations that it overcharged minorities for home loans and wrongly steered them into subprime mortgages requires the bank to pay $125 million in damages, including about $10 million to African Americans and Latinos in the Los Angeles area. The settlement, announced Thursday by theU.S. Justice Department, also requires the San Francisco company, by far the nation's largest home lender, to provide $50 million in down-payment assistance to residents of areas where the alleged discrimination had a significant effect.
BUSINESS
April 5, 2012 | By E. Scott Reckard
Delinquencies are lower in all 11 consumer loan categories tracked by the American Bankers Assn. , a rare occurence that reflects the nation's improving jobs picture and progress that consumers and banks have made in cleaning up their respective financial messes. During the fourth quarter of 2011, borrowers were current more often than in the third quarter on home equity loans and lines of credit, property-improvement loans and loans for cars, boats and mobile homes, the banker trade group said in a new report . Delinquencies on bank-issued credit cards were at 3.27% of all accounts, down from 5.01% in the second quarter of 2009.
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