subprime mortgages

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Feds Investigate Bear Stearns Fund Manager

Insider-trading probe targets $2M move ahead of fund collapse

(Newser) - The manager of hedge funds that lost $1.6 billion when they went bankrupt in July has left Bear Stearns, and federal investigators are looking into whether he withdrew his own money before the collapse. Ralph Cioffi moved $2 million in March—before the funds tanked in the subprime collapse—...

Morgan Stanley Stuns With $9.4B in Writedowns

CEO gives up bonus in face of terrible performance

(Newser) - Morgan Stanley, the nation's second-largest investment bank, lost $3.59 billion this quarter, its first loss ever, after taking a whopping $9.4 billion in writedowns on mortgage-backed securities. CEO John Mack, who promised to give up his 2007 bonus as penance for the losses, also announced a $5-billion cash...

Fed Cracks Down on Loose Lending
Fed Cracks Down on
Loose Lending
Dec 18, 2007 7:43 PM CST

Fed Cracks Down on Loose Lending

Unanimous vote marks historic shift toward regulation

(Newser) - Seeking to avoid another subprime meltown, the Federal Reserve cracked down on mortgage lending today by a unanimous 5-0 vote, the Wall Street Journal reports. If approved next year, the Fed proposals will require creditors to consider borrowers' financial and credit status, but will not prohibit prepayment penalties altogether, a...

Brits Hatch Secret Plan to Bail Out Northern Rock

No good options for struggling bank

(Newser) - Worried that the state might be stuck nationalizing Northern Rock, Britain has worked up a contingency plan behind closed doors to divide the troubled bank among the country’s commercial banks. A private buyout is still preferable, the Guardian reports, but some now fear the main bidders will back out,...

Credit, Economy Bring M&A Action to a Crawl

After a golden year for LBOs, experts see a chilling of a once-hot market

(Newser) - The slowing economy and financing costs that have more than doubled since June because of the subprime collapse could ice the pace of mergers and acquisitions in 2008, Bloomberg reports. After a record $3.9 trillion in deals in 2007, analysts predict transaction value could plummet 20%. "The mega-LBO...

Nov. Housing Starts Fall 3.7%
Nov. Housing Starts Fall 3.7%
Dec 18, 2007 10:30 AM CST

Nov. Housing Starts Fall 3.7%

And permits for new homes fall to 14-year low

(Newser) - Housing starts fell less than expected in November, but fall they did, extending the worst housing slump since 1991. Starts fell 3.7% and, according to one analyst, probably won’t turn around until the third quarter of next year. Permits issued, which give a picture of future construction, fell...

Goldman Earnings Hit Record
Goldman
Earnings Hit Record
Dec 18, 2007 9:25 AM CST

Goldman Earnings Hit Record

Firm soars on trading, M&A, shorting subprime as others falter

(Newser) - Still sitting pretty above the subprime fray, Goldman Sachs trumped estimates today and reported a 2% jump in profits in the fourth quarter, breaking the annual profit record for the fourth straight year. Goldman shorted subprime mortgages, profiting from the disaster that sank competitors, and in the quarter actually boosted...

Fed Plans to Tighten Mortgage Lending Rules

Proposals will rein in subprime lenders

(Newser) - Stricter rules will face mortgage lenders if a Federal Reserve proposal unveiled today moves forward. The Fed wants to prohibit or limit prepayment penalties, force lenders to make sure borrowers set aside money for taxes and insurance, require lenders to verify income, and prohibit lenders from giving borrowers unaffordable loans,...

Senate Votes to Aid At-Risk Homeowners

Bill, approved 93-1, would allow feds to back refinanced loans

(Newser) - In an attempt to quell the ongoing housing crisis, the Senate approved a bill today that would allow the Federal Housing Administration to back refinanced loans for the thousands in danger of defaulting on mortgages. The bill, which passed 93-1, also repositions the FHA as an attractive alternative to subprime...

Citigroup to Bail Out Struggling $49B SIVs

Citigroup reverses course; Moody's downgrades its credit rating

(Newser) - Citigroup will take over seven subprime-plagued investment funds, with $49 billion in assets, and provide emergency support if necessary, to keep them solvent, the Wall Street Journal reports. The decision yesterday to bail out its affiliated SIVs—structured-investment vehicles—is a reversal of Citi's earlier decision to keep them off...

Selloff May be Next Under New Citigroup CEO

Pandit's 'front-to-back review' will look for options to boost capital

(Newser) - Major restructuring and sales of businesses appear to be on the table for embattled Citigroup, Bloomberg reports, with new CEO Vikram Pandit today promising a "front-to-back review" of operations at the financial giant battered by the subprime crisis. Citigroup stock has fallen 40% this year; one analyst called it...

Freddie Mac Chief: Housing Market Will Get Worse in 2008

Tells investors to expect losses in fourth quarter

(Newser) - Predicting even tougher times for the US housing market, Freddie Mac chief Richard Syron yesterday told investors in New York that the government-sponsored mortgage lender would report another net loss in the fourth quarter and credit losses to $12 billion on its mortgage portfolio, reports the Financial Times. Freddie Mac...

Americans Split on Borrower Bailout
Americans Split on Borrower Bailout
Dec 11, 2007 12:54 PM CST

Americans Split on Borrower Bailout

Lenders get no sympathy: 72% in poll oppose help

(Newser) - About half of Americans say borrowers snared in the subprime mortgage mess brought the trouble onto themselves, but they nevertheless deserve "special treatment," CNNMoney reports. In a poll of 1,002 adults, 51% also said they felt sorry for borrowers, with 46% blaming financial institutions' lending policies for...

Mortgage Crisis Rivals S&L, Tech Busts

Complex implosion could take far longer to untangle, experts say

(Newser) - How does the current mortgage debacle measure up to the savings-and-loan meltdown of the 1980s and the tech crash of 2000? Losses look manageable, the Wall Street Journal reports in a detailed analysis of how this crisis differs from other crashes, and how likely it is to spin the economy...

Pending Home Sales Rise Slightly
Pending Home Sales Rise Slightly
Dec 10, 2007 11:11 AM CST

Pending Home Sales Rise Slightly

New numbers make quarter-point cut more likely, traders say

(Newser) - US home sales jumped in October and will rise slightly overall next year, beating forecasts, the Wall Street Journal reports. The National Association of Realtors' index for pending sales of existing homes spiked 0.6% in October over September, which was up 1.4% over August—but those increases are...

UBS Writes Down $10B; Sells $11.5B Stake

Subprime exposure will cost bank Q4 profit, result in loss for the year

(Newser) - Investors from Singapore and the Mideast will breathe $11.5 billion in new capital into UBS as the Swiss banking giant announces that it will write down an additional $10 billion in subprime holdings, Bloomberg reports. The bank said the subprime losses, the biggest  by a European bank, will wipe...

Some Critics of Rate Freeze May Be Angry Investors

FDIC chief speculates that investors are blasting the plan to boost their income

(Newser) - Critics of the government’s new rescue plan for strapped homeowners may be investors who would cash in on a foreclosure-ridden market, one of the plan’s chief architects charges. Sheila Blair, head of the FDIC, speculated that naysayers may have a conflict of interest, the Wall Street Journal reports....

Rate Freeze Rewards Greedy, Critics Grumble

'What about those of us who played by the rules?'

(Newser) - Many who played it conservative during the housing boom are miffed about the mortgage rate freeze, grumbling that it rewards the greedy and irresponsible, the Washington Post reports. "What about those of us who played by the rules?" asks one. "Can we get six months of free gasoline?"...

Dems Pitch Own Mortgage Plans
Dems Pitch Own Mortgage Plans
Dec 6, 2007 2:56 AM CST

Dems Pitch Own Mortgage Plans

They say Bush's freeze falls short

(Newser) - Democratic candidates are criticizing President Bush's plan to bail out homeowners in the subprime mess for not going far enough and have outlined their own, more ambitious, proposals, the New York Times reports. "It appears that the president is pushing a freeze for a very narrow group of borrowers,...

Bush to Offer Mortgage Freeze
Bush to Offer Mortgage Freeze
Dec 5, 2007 1:07 PM CST

Bush to Offer Mortgage Freeze

Plan would help homeowners facing rate increases

(Newser) - President Bush will detail tomorrow the Treasury Department's plan to hold interest rates steady for subprime borrowers at risk of defaulting on their mortgages when rates rise, Reuters reports. The plan, negotiated with mortgages lenders and investors, would freeze for five years adjustable loans due to jump to higher rates...

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