Although credit card delinquency rates still hover near record lows, more consumers are starting to fall behind on their payments. The rate rose 0.71% in the third quarter, the first time it has moved up since 2009.
This week brought a bit of good news for some troubled homeowners in the form of two separate settlement activities. The FTC has begun mailing refund checks to 450,000 Countrywide customers, and Wells Fargo reached an $85 million settlement with the Fed that will provide relief to up to 10,000 customers.
The administration's proposed revamp of Fannie Mae and Freddie Mac is actually an offering of multiple policy options, essentially passing the political hot potato to the Republicans. Problem is, any fix is sure to make mortgages costlier, with potential harm to the housing market.
Allstate is suing Bank of America and its Countrywide Financial division over Countrywide's sale of $700 million in mortgage-backed securities to the insurance giant, alleging that Countrywide knew in advance that the assets would drop in value because of a high percentage of defaults.
General Motors Financial reported Tuesday its earnings nearly doubled in the third quarter compared to last year, aided by a drop in expenses.
Countrywide Financial Corp. co-founder Angelo Mozilo, along with two others, has reached a settlement agreement with the Securities and Exchange Commission related to charges of insider trading and civil fraud.
General Motors will once again have its own in-house financing unit starting Friday, when the auto giant closes on its $3.5 billion purchase of AmeriCredit. The new unit, to be renamed General Motors Financial, will allow GM to offer consumers more financing and leasing options.
Angelo Mozilo, former CEO of Countrywide Financial, must face trial on charges he misled investors about the risks associated with subprime lending, a judge in Los Angeles ruled. U.S. District Judge John F. Walter denied requests from Mozilo and two other former Countrywide executives for a ruling that there were no genuine issues to be tried, Bloomberg News said.
After accusing Citigroup of misleading investors to the tune of more than $50 billion, the Security and Exchange Commission's proposed settlement of $75 million raised more than a few eyebrows -- including those of a federal judge. Now the SEC defends its proposed fine.
Three months after turning in its first profit since bankruptcy, GM is expected to report even bigger profits during the second quarter when it releases its latest results on Thursday.
Getting out of subprime mortgage lending makes economic sense for banking giant Wells Fargo. But its questionable record of lending practices in black and Hispanic communities is another good reason to quit the business.
In the late '80s and early '90, more than 1,000 savings & loans failed in a financial crisis that cost the government $220 billion to resolve. By contrast, it looks like TARP will only cost the government $105 billion. So is the current financial crisis only half as bad? Not bloody likely.
One of the most disturbing aspects of the home foreclosure crisis is how much damage it has caused in minority communities. Activist group Committee for Responsible Lending finds black and Hispanic borrowers are twice as likely to have lost their homes.
Goldman Sachs is facing another SEC inquiry into its handling of a collateralized debt obligation, this time involving a security called Hudson Mezzanine, which was based on low-quality subprime mortgages. Goldman sold the CDOs to investors, then bet against them.
Bank of America has agreed to repay $108 million to 200,000 struggling homeowners who were overcharged fees by Countrywide mortgage services companies prior to 2008.
The New York Times recently looked at the plight of Cortney Munna, a graduate of New York University struggling with nearly $100,000 in student loans, and asked: Should schools abet students in the process of financial self destruction, or should they follow a higher purpose?
As laid out by the SEC, Goldman Sachs's CDO sale appears to be textbook securities fraud. The two keys are whether Goldman and VP Fabrice Tourre made material misstatements or omissions, and whether they had sufficient intent to deceive or defraud.
"I accept responsibility for everything that happened on my watch," Daniel Mudd, former CEO of Fannie Mae said Friday. The need to support affordable housing and home ownership ultimately made it impossible for it to succeed in its other mission: making a profit.
Sure, Lehman's accounting gimmicks played a role in its downfall, but the star of the show was a business strategy the left prudence behind in an all-out pursuit of risk and reward. Too bad risk won out.
Let's not forget that unprecedented government intervention is the only thing keeping the the housing and mortgage markets afloat. This level of support is so massive that many are wondering what will happen when the government finally pulls the plug.
