Recent Articles
Draft legislation that would change how over-the-counter derivatives are regulated might prohibit most trading in the $29 trillion credit-default swap market. Is this needless regulation or a good idea announced too late to stop a disaster? Let’s ask the biggest party givers – AIG. U.S. regulators and politicians are stepping up pressure on banks to use clearinghouses and agree to increased oversight of the OTC markets to improve transparency amid the credit crisis. Bad bets on credit-default swaps led to the U.S. takeover of American International Group Inc. in September.
Here is some food for thought during the current financial crisis. When I read the book “The Millionaires” I realized that I used some of the same words in previous blog articles and off-the-record discussions:
There are many people facing foreclosure. The situation is totally unacceptable. The number of older homeowners facing foreclosure, over 700,000 of whom are 50+, means it will be hard to recover in a slowing economy, and the fact that statistics are that high is also totally unacceptable. Imagine working all your life just to see it disappear, regardless of age. Should we be proud of ourselves for stimulating the economy for a while? The country should have strong economic stimulus plans, and should never rely on duping homeowners to release the equity in their homes for economic gains.
This is a recap. Merrill Lynch & Co. Inc. said in a financial report that it has agreed to pay $550 million to settle separate class action lawsuits stemming from subprime loss disclosures. The Ohio State Teachers Retirement System, the lead plaintiff in one lawsuit brought on behalf of stock purchasers, agreed to a proposed settlement totaling $475 million in cash. The other suit was brought by employees, and was settled for $75 million.
Now that mortgage rates are low what does it take to refinance your home? A recent analysis by Inside Mortgage Finance found that the average score for borrowers whose loans were sold to Fannie Mae and Freddie Mac was 748 out of a possible 850. Clearly many borrowers with impaired credit will not be able to refinance as lenders are unwilling to part with money to refinance the credit-impaired sector. The problem is a two-pronged issue that often requires borrowers to hurt their credit before a work-out is considered.