Financial Solution News

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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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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FBI: 2008 Could Be Record Year for Suspicious Activity Reports

Financial institutions filed a record 15,000 suspicious activity reports (including instances of mortgage fraud) with the Federal Bureau of Investigation in the first fiscal quarter of this year. If the pace keeps up, more than 60,000 SARs will be filed, outstripping 2007, when 46,717 reports hit the system.

In a briefing on January 29, FBI officials said the agency has 14 major “corporate fraud” investigations under way involving mortgage or related companies. The focus, officials said, was on subprime mortgage firms, their accounting and lending practices, and insider trading. The agency did not specify any cases, but it is well known that the collapse of New Century Financial, is the subject of a major probe.

As previously reported, the Securities and Exchange Commission is investigating the failure of several subprime firms, focusing on, among other things, their investment bankers, including Bear Stearns, Merrill […]

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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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Bush Praises Subprime Mortgage Strategy
President Bush says it is “going to take a while to work through this mortgage bubble,” but that his administration does have a strategy for helping subprime borrowers refinance or restructure their mortgages.
Bush said in a speech on the economy that the Treasury Department has worked with mortgage servicers so borrowers don’t “get pinched as their interest rates reset”. He also noted that the Federal Housing Administration is helping to refinance subprime borrowers and could do more if Congress passes an FHA modernization bill. (The Senate just passed such a bill, which now has to be reconciled with the House version).
Former Federal Reserve Board Chairman Alan Greenspan has suggested that the federal government could provide cash assistance for distressed homeowners who can’t afford their mortgage payments.
Mr. Bush stressed in his speech that he is against bailouts for lenders, speculators, and people who bought a house […]

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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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House Panel OKs Bankruptcy Bill
The House Judiciary Committee approved a narrowly targeted bankruptcy bill by a 17-15 vote 12/12/2007 that would give subprime and nontraditional mortgage borrowers facing foreclosure one last chance to get their mortgage restructured so they could stay in their homes.
Only homeowners who have received a foreclosure notice could seek a Chapter 13 restructuring under a compromise worked out between committee Democrats and Rep. Steve Chabot, R-Ohio.
Under the bill, bankruptcy judges could waive prepayment penalties and reduce the mortgage amount to the fair market value and reduce the interest rate to a conventional rate plus a risk premium.
This restructuring would be limited to both subprime mortgages and nontraditional mortgages originated from 2000 through the date of enactment of the legislation.
The Mortgage Bankers Association and the American Bankers Association oppose the bill.
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