Lenders

MIAMI - In a new foreclosure crisis that has gone national, attorneys general in all 50 states plus the District of Columbia have launched a sweeping probe of the country's lenders, even as new figures showed banks repossessed a record number of homes in September. The joint investigation announced Wednesday, led by Iowa Attorney General Tom Miller, seeks to find out whether mortgage servicers and banks have been using flawed documents in court proceedings that have dispossessed hundreds of thousands of distressed homeowners.

The Inquirer and Philadelphia Daily News took large steps toward exiting bankruptcy Thursday when a federal judge approved a reorganization plan for the papers' parent company, Philadelphia Newspapers L.L.C. The newspapers and the website, Philly.com, are now set to be in the hands of new owners - a collection of about 30 financial institutions - by no later than next Friday. The prospect of a smooth transition also improved when the new owners announced after the hearing in U.S. Bankruptcy Court here that they had reached an accommodation with the mailers, a key company union.

I recently introduced Sunday Business section readers to Bob Cooke and Jon Anderson of Chester County, who don't know each other but had a problem common among homeowners who had or anticipate trouble keeping up their mortgage payments. First, such homeowners are told they are eligible for trial mortgage modification under a government program and advised by their lenders to reduce payments until permanent modification is approved. Then, six months or so later, they learn they actually aren't eligible for modification, and that since they are now several months in arrears - because they had been told not to make full payments - foreclosure proceedings have begun.

The Inquirer and the Philadelphia Daily News were sold again to their senior lenders Thursday, this time under terms that require the sale to close with or without a contract agreement with the papers' drivers. The lenders' bid of $105 million cash for Philadelphia Newspapers L.L.C., which owns the papers and the website Philly.com, was identical to its winning bid in April at the company's first auction. The total deal is worth $139 million when the North Broad Street headquarters plus some other incidentals are included.

A coalition of Philadelphia Media Holdings L.L.C.'s largest debtholders has again won ownership of The Inquirer, the Daily News and Philly.com. The group of senior lenders, 16 financial institutions including Angelo, Gordon & Co., Alden Global Capital and Credit Suisse, submitted the winning bid of $105 million in cash today at an auction conducted before Chief U.S. Bankruptcy Judge Stephen Raslavich here. Once again, the senior lenders group outbid a challenge - it started at $50 million and then was increased to $85 million - by local investors Raymond Perelman, businessman and philanthropist, and the Carpenters Union pension fund.

The senior lender for the luxury 10 Rittenhouse Square condo project is seeking to foreclose on it and place the 33-story Center City high-rise in receivership. Istar Tara L.L.C., of New York, which originally had about $251 million in two loans tied up in the Robert A.M. Stern signature building at 130 S. 18th St., has filed suit in Common Pleas Court to foreclose on the building. There are 135 condos, priced from $600,000 to $15 million, at 10 Rittenhouse, as well as retail and restaurant space.

I recently suggested here that, based on the response to an article I had written about predatory lending, few people seemed to know what it was. Of course, that brought reaction from both sides to what was simply an observation gleaned from a large harvest of e-mails and phone calls after a relatively tiny story that appeared deep inside a Wednesday Business section. To clear things up - personally, I consider even solicitations from credit card companies predatory - I provided an academic definition from the Center for Housing Studies at Harvard.

Arden Hander of Meadowbrook, like thousands of homeowners who had their mortgages originated by ABN Amro, now has his loan serviced by Citimortgage, which took over the Netherlands-based lender's portfolio a few years back. There's nothing unusual about that. What's more, Hander fits into that group - 75 percent of people who borrowed to buy a home - with problem-free loans. The Handers' mortgage, taken out in March 2003, was a standard 20 percent down and originally for $297,000.

   Small-business lending is down.    Pick a reason, but that won't change the fact that lots of small firms would like to borrow money to expand or buy some new equipment right now.    So, what to do?    Well, the Philadelphia District of U.S. Small Business Administration is planning to host four "matchmaking events" this month where hopeful borrowers can pitch willing lenders. And the price seems right: free.    The first will be held next Wednesday at the Radisson Valley Forge Hotel in King of Prussia from 9 a.m. to noon.