Lenders

After almost 90 minutes of arcane legal arguments on an issue that could ultimately determine who will own Philadelphia Newspapers L.L.C., a federal bankruptcy judge had a simple question yesterday for the company and its debt holders: How will you suffer if I rule against you? Company lawyer Lawrence G. McMichael said the firm's properties - The Inquirer, the Philadelphia Daily News, and Philly.com - might suffer if sold to a buyer that had not shown a proven ability to raise ready cash, as would be required by a ruling favorable to the company.

Philadelphia Newspapers L.L.C.'s latest offer to settle its debt with its senior lenders might not have enough support among those lenders to win approval, company chief executive officer Brian P. Tierney said last night. Tierney said informal discussions with lenders had left that impression. Lenders holding more than 50 percent of the $300 million debt must support the offer, which otherwise will expire at 5 p.m. today. "We are not getting a clear-cut answer to what it would take to get a deal done," Tierney said.

In court documents filed this week, Philadelphia Newspapers L.L.C. and its largest creditors argued anew over whether the company had a right to know how much debt each lender held and at what price it was purchased. From the company's position, the information is central to establishing a fair-market value for the media firm, which owns The Inquirer, the Philadelphia Daily News, and Philly.com. Its senior lenders contend that the demand is designed to keep them from bidding on the company, thus promoting the chances of the current management's retaining control.

After taking billions in federal bailout money, large banks should find it in their alleged hearts to modify more mortgages for struggling homeowners. But the Obama administration's first report on mortgage modifications shows that many lenders are performing dismally on this front. From February through July, only 9 percent of eligible homeowners were accepted for trial programs. Two major banks, Bank of America and Wells Fargo, were among the worst at helping homeowners lower their mortgage payments.

AARP, a powerful organization that represents older citizens, announced a national campaign yesterday to combat abusive mortgage lending that preys on elderly homeowners and other groups. The effort by the politically influential grass-roots lobby, formerly known as the American Association of Retired Persons, calls for consumer education, legislative lobbying and legal action against so-called predatory lenders. The AARP campaign comes as Philadelphia and other cities and states lead a national movement to stop abusive practices by high-cost lenders.

An auction of the operating assets of Philadelphia Newspapers L.L.C. scheduled for Wednesday will be postponed at least a week as a result of a ruling yesterday by U.S. District Judge Eduardo C. Robreno. Robreno had ruled Tuesday that the newspaper company's senior lenders did not have a right to bid the value of about $318 million in loans in the auction, which is designed to determine the fair-market value of the company's assets. That ruling overturned a decision by Chief Bankruptcy Judge Stephen Raslavich, who had authorized a so-called credit bid by the lenders, a group that includes Citizens Bank, Angelo, Gordon & Co., the CIT Group Inc. and Eaton Vance Corp.

Are you a good poker player? A hard bargainer? Do you have the ability to face down your opponent without flinching? If so, you may be able to save yourself thousands of dollars over the life of your mortgage simply by applying to and being approved by more than one lender. Then, a day or two before the closing, you can play one against the other. Of course, this advice goes against everything the mortgage industry tells consumers. Sure, lenders say borrowers should shop for the best rates and terms.

When her mortgage adjusted to 7.7 percent from 5.5, and the $975 payment equaled about half her monthly disability pension, it looked as if Deserie Jones-Wright, a former Philadelphia police officer and a Navy veteran, would lose the house she had owned for 11 years. But thanks to the city's nearly year-old foreclosure-diversion program, she and her lender, Everhome Mortgage Co., agreed recently to lower the rate on her VA mortgage to 5 percent, or $572 a month. "I just sent off the first new payment today," Jones-Wright, 47, said Thursday, with a sigh of relief.

A new group set up by Camden Mayor Arnold W. Webster is looking to help Camden residents who want to own their own homes. Dubbed the Mayor's Mortgage Group, the fledgling consortium of a dozen lending and mortgage institutions will work with the mayor's revitalization program called Project Arizona, officials said yesterday. The group hopes to help developers of projects such as Dayton Manor and Royal Court find underwriters for mortgage candidates in the city. The program will begin with the opening of Phase One of the Royal Court Townhouses in Camden in mid-September, officials said.

When the Philadelphia Redevelopment Authority came up with the idea of rewarding city homebuyers with an extra 10 to 40 percent yearly tax credit, it thought it had a winner. There should be plenty of people eager to add nearly $960 a year to their federal income tax refund for as along as they owe interest on their mortgage. It might even, the RDA hoped, persuade some suburban-bound buyers to make a U- turn back into the city housing market. The program has been a resounding dud. Fewer than six homebuyers have applied for the MCC program since it was introduced in June.