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Rates of foreclosure starts were above the national average in only eight states: Nevada, Florida, California, Arizona, Michigan, Rhode Island, Indiana and Ohio. Yes, tiny Rhode Island made the top 8 list. Foreclosures can be spotted in small towns and bigger cities almost anywhere in the United States. As personal budgets are strained winter heating costs will tell a tale. In many cases it will be a tale of woe, unless jobs are restored, fuel prices decrease, and food prices return to normal.
Senior Bush administration and Federal Reserve officials called in top executives of Fannie Mae and Freddie Mac on Friday and told them that the government was preparing to place the two companies under federal control, officials and company executives said. The executives were told they and their boards would be replaced and shareholders would be virtually wiped out, but the companies would be able to continue functioning with the government generally standing behind their debt.
Orson Benn, a former VP of subprime lender Argent Mortgage is off to prison for 18 years. Argent was one of Ameriquest’s divisions. Although it doesn’t do much for homeowners, it is nice to see something has happened. Remember, if you will, that George Bush named Ameriquest’s owner, Roland Arnall, as ambassador to The Netherlands. Some say Ameriquest settled charges of predatory lending so Arnall would be confirmed as ambassador. In 2005, Ameriquest Capital and three of its subsidiaries comprised four of the 53 entities that each contributed the maximum of $250,000 to the second inauguration of President George W. Bush.
The New York attorney general’s office is issuing subpoenas to several Bank of America Corp executives as the state broadens its probe into the bank’s marketing of auction-rate securities, a person familiar with the investigation said on Wednesday. As it should be, we say. The lawyers are coming out in droves, asking the question “Did you lose money?” Two credit Suisse brokers took auction rate securities fraud to a new level (or new low depending on your outlook) by telling investors that the securities were backed by school loans, when in fact the securities were backed by subprime mortgages.
Further proof that the subprime mortgage fiasco is still with us appeared today as GMAC dropped a bomb. GMAC Financial Services and its Residential Capital subsidiary plan to close all 200 GMAC mortgage retail offices nationwide, and cut the ResCap work force by 5,000 employees, or 60 percent. Workers say the field is already saturated, making it difficult to find another job with the same skill set. Many people expected the layoffs sooner.