Archive for August, 2007

East German State Run Bank Calls It Quits

Written by Leatherneck on August 26, 2007 under Archives, International

PARIS, Aug. 26 — The eastern German state of Saxony was forced to sell a troubled state-run bank Sunday as the global liquidity crisis set off by the United States subprime mortgage problems claimed its first major European victim. As a result of the market turbulence and the resulting pressure on the bank, continuing its activities without a partner would not be feasible.

Fixed Payment Option ARM a Recipe for Disaster

Written by Timothy Blake on August 26, 2007 under Archives, Editorial

The tide of foreclosures has steadily been increasing throughout 2006. Since October of 2004 the prime rate has quadrupled. Loans made in 2004 saw their first reset to a higher rate. Soon to follow are loans made in 2005 and the second reset for loans made in 2003. If the prime rate remains steady the eye of the storm will be over us in 2008. Then it should get really interesting.

Fed bends rules for Citigroup and Bank of America

Written by Leatherneck on August 26, 2007 under Archives, Government Positions

In a clear sign that the credit crunch is still affecting the nation’s largest financial institutions, the Federal Reserve agreed this week to bend key banking regulations to help out Citigroup and Bank of America, according to the Fed’s own documents.

Fannie Mae Might Be Near Limit

Written by Leatherneck on August 24, 2007 under Archives, Government Positions, Investors, Lenders

At the end of June, Fannie Mae estimated its mortgage portfolio reached $715 billion, just $13 billion under the federal limit. With recent requests to federal regulators to life the cap on its mortgage debt holdings rejected, Fannie may have difficulty continuing to buy up securities of any kind, whether commercial or residential.

Revolving Credit Takes Their Bite

Written by Timothy Blake on August 24, 2007 under Archives, Editorial

Some consumers have reported increased credit card rates and reduced available credit after their mortgage company failed. They were not late on payments, they just have a loan with a distressed lender. Not all borrowers and loans served by American Home, New Century, and Novastar are risky exploding ARMs or in default.

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