Financial Solution News

The European Central Bank’s president is playing down prospects of further interest rate increases. They raised their benchmark lending rate to 4.25%.
“The monetary policies stance after today’s decision, contributes to achieving our objective of price stability. We are never pre committed. It is a constant feature of our monetary policy. We do what is necessary to deliver price stability in the medium term and be credible and that delivery. Thursday’s 0.25% increase will help bring inflation back below 2%. We saw the little bit of a rebound, but that was chili weakness for the zero after this decision”.
With the US off for the July 4 holiday, he really is damping down prospects of further interest  rate increases. Traders took that as a bad sign, by selling the Euro down to a one week low against the dollar.
Nobody much likes the pound because of the UK subprime crisis. The pound has […]

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Massachusetts has some new tools to fight the foreclosure crisis. Twenty million, to be exact.
The state has just activated a 20 million dollar loan fund for community groups to buy foreclosed homes before they become neighborhood wrecking eyesores and worse.
Foreclosures are devastating both for individual homeowners and their families and also to communities.
The 20 million dollar fund will provide loans of 250 thousand to a million dollars to community groups.
That’s expected to buy 250 to 500 foreclosed homes and apartments, with the Boston, Brockton, Chelsea, Lawrence, New Bedford, Springfield, and Worcester areas.
Notably, it doesn’t use any state money. 17 million comes from private lenders in the Massachusetts housing investment corporation, 2 million from the Boston foundation, and 1 million from the Hyams foundation in Chelsea.

IT’S A WONDERFUL example of people coming together to try to solve a problem
The fund is being launched as Massachusetts is facing what many housing […]

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CIT Completes Exit of Business Including Entire Loan Book and Servicing Operations

NEW YORK-(BUSINESS WIRE) CIT Group Inc. (NYSE: CIT), a leading global commercial finance company, announced today that it has agreed to sell its Home Lending business, consisting of $9.3 billion in assets and related servicing operations, to Lone Star Funds for $1.5 billion in cash and the assumption of $4.4 billion of outstanding debt and other related liabilities. The servicing centers, which employ approximately 300 people, are located in Marlton, NJ and Oklahoma City, OK.
In a separate transaction, CIT agreed to sell its approximately $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance, Inc. for approximately $300 million. Net cash proceeds from the two transactions are expected to be approximately $1.8 billion.
In the second quarter of 2008, CIT expects to record an estimated pretax loss for the Home Lending segment of […]

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Shakeups at Washington Mutual and Wachovia. Roundtable Discussion with Andrew Seibert of Nextier Wealth Management and Forbes CEO Steve Forbes.
Washington Mutual shares are down after Kerry Killinger stepped down as chairman. Shares of Wachovia are falling to below is the value in almost 13 years after Ken Thompson was ousted.
Chairman Lanty Smith has been appointed interim CEO. Is this new management what these companies need to get back on track? Are there more troubles for financials?

I think their values will go lower until they get a feel for who will take over. There are probably more Writedowns to come.
These banks have not gone beyond the problem of the Subprime Mortgage Industry and there is possibly another shoe to fall. If the Credit Deterioration continues, there will be many more problems.
 
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New foreclosure filings rose 4% in April and were nearly 65% higher than the level recorded a year earlier, according to RealtyTrac.
The company’s U.S. Foreclosure Market Report indicates that foreclosure filings, default notices, auction sale notices, and bank repossessions were reported on 243,353 properties in April.
"The total number of U.S. properties with foreclosure activity in April was the highest monthly total we’ve seen since we began issuing the report in January 2005," said James J. Saccacio, RealtyTrac’s chief executive officer. "Although only about 2% of households nationwide are in foreclosure, these properties contribute to already-bloated inventories of homes for sale and put downward pressure on home values."
The company noted California, Florida, and Ohio recorded the highest foreclosure rates in April.
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Critics are blaming Alan Greenspan for today’s financial crisis, but now the former Federal Reserve chief is fighting back.
Greenspan sets the record straight in an exclusive interview.

Part 1

Part 2

What are others saying about Alan Greenspan

Alan Greenspan unfair blame for sub prime crisis…

Why do people blame Alan Greenspan for the sub-prime crisis? He lead the Federal Reserve Board during the dot-com crash, 9/11 and following years when interest rates in the US fell as low as …lead
- http://www.searchforvideo.com

The Stock Market Crash Of October, 1987

Alan Greenspan was appointed Chairman of the Federal Reserve Bank in August of 1987 and at this time was standing in the shadow of Paul Volcker, whom Wall Street trusted as a tested leader in moments of crisis
Exploit The Market - http://exploitthemarket.com/

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We have seen $90 billion of writedowns to date. Standard and Poor’s is saying that you can super size that order. Writedowns total losses are expected to be $265 billion or more.
So far, Wall Street has been shouldering the brunt of the losses. S&P says the next losses will affect smaller financial institutions including regional banks in the U.S., credit unions, and lenders in Europe and Asia.

Just yesterday, UBS, the biggest Swiss bank, wrote down $14 billion of assets.

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Federal Reserve To Revise Home Ownership and Equity Protection Act
The Federal Reserve Board will meet Dec. 18 to issue long-awaited revisions to its Home Ownership and Equity Protection Act regulations that address abuses associated with the subprime mortgage industry.
The proposed HOEPA rule will address prepayment penalties, failure to escrow taxes and insurance, stated income and low documentation lending, and ability to-repay standards.
In a letter to the Fed, 17 Democrats on the Senate Banking Committee urged the Fed to act “forcefully” to protect consumers.
“We appreciate the fact that the Board is moving forward with a rule making under HOEPA, and expect the Board to meet the duty Congress entrusted to it to end the abusive practices … that have undermined confidence in the subprime mortgage market and the economy as a whole,” the Dec. 7 letter says.
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Part 2

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