News

Reuters - Bank of America Corp , the
largest U.S. retail bank, may set aside a record $6.5 billion
in the first quarter to cover possible future loan losses,
including in its mortgage and home equity portfolios, according
to a banking analyst.

Reuters - As hundreds of thousands of American
home owners fall behind on their mortgage payments, more people
are turning to short-term loans with sky-high interest rates
just to get by.

AFP - The United States should use public funds to shore up its financial system and calm recent market turmoil, Japan’s financial services minister said in an interview published Monday.

Reuters - The world economy may be in for a
painful reality check this week, should a heavy slate of
housing-related data point to more mortgage malaise.

Reuters - The United States should inject public
funds into its financial system to solve the mortgage crisis
that has sparked global credit fears, Japan’s financial
services minister was quoted as saying by the Financial Times.

BusinessWeek Online - It’s ugly on Wall Street. With the subprime mortgage meltdown, credit crunch, and falling stock market, investment bankers are facing the worst job losses since the months following September 11. In the wake of its near collapse last week, Bear Stearns is expected to lay off at least half of its 14,000 employees. Citigroup said on Mar. 20 that it plans to add 2,000 layoffs to the 4,200 it announced in January. And many bankers are wondering not only which firms will be hit next, but whether their own jobs are safe.

AP - The subprime mortgage crisis has yielded at least one benefit for states: Mortgage-related investments have become so cheap that they are luring some pension funds to buy.

Reuters - The Federal Reserve and Bank
of England denied a report on Saturday that they were in talks
over possibly using public funds to make mass purchases of
mortgage-backed securities to ease the global credit crisis.

AP - Just when consumers and the U.S. economy need banks to lend more freely, the mortgage industry is making it harder to borrow — even for those with good credit.

BusinessWeek Online - Another stone fell into place in the federal government’s plan to build a path to credit market recovery. On Mar. 19, the Office of Federal Housing Enterprise Oversight, or OFHEO, said it was reducing the amount of capital it requires Fannie Mae and Freddie Mac to maintain on their balance sheets above statutory requirements. By reducing the capital surplus level from 30% to 20%, the regulator will provide up to $200 billion in immediate liquidity to the distressed mortgage-backed securities market.

Reuters - Citigroup Inc is cutting about
2,000 more investment banking and trading jobs, a person
briefed on the matter said, as the largest U.S. bank moves to
lower costs after subprime mortgage and credit problems led to
a record quarterly loss.

Reuters - Stocks jumped on Thursday, capping a
tumultuous week, on optimism that giving Fannie Mae and Freddie
Mac a bigger role in the mortgage market will ease a credit
crunch that claimed Bear Stearns as its biggest victim.

Reuters - Two U.S. home financing heavyweights
won government approval on Wednesday to pump $200 billion more
into troubled U.S. mortgage markets, the latest step to
stabilize credit markets and avert a deep recession.

AP - Treasurys staged a massive rally Wednesday, as fears about continuing fallout from the credit crisis prompted investors to seek safe assets ahead of a long holiday weekend.

AP - The government on Wednesday relaxed capital requirements at Fannie Mae and Freddie Mac as part of a plan to quickly inject an additional $200 billion of financing for home loans.

Reuters - An influential Democratic
congressman said on Wednesday the Bush administration was
willing to discuss a bold plan he proposed to tackle the
nation’s worsening mortgage foreclosure crisis.

AP - Stocks pulled back sharply Wednesday, erasing most of the previous session’s big gains as investors grew concerned about the possibility that banks remain vulnerable to further problems from soured debt. The Dow Jones industrial average fell nearly 300 points after rising 420 on Tuesday.

Reuters - Thornburg Mortgage Inc said on
Wednesday that it would try to quickly raise nearly $1 billion
of capital to keep five lenders at bay and avoid a collapse for
the struggling “jumbo” home loan provider.

AFP - US regulators announced a plan Wednesday to allow government-sponsored mortgage firms Fannie Mae and Freddie Mac to pump an extra 200 billion dollars into the troubled housing market.

Reuters - E*Trade Financial Corp , an
online brokerage struggling with heavy mortgage losses, on
Wednesday said R. Jarrett Lilien plans to resign as president
and chief operating officer, less than three weeks after Donald
Layton filled the vacant chief executive post.