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Subprime

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BUSINESS
March 18, 2007 | By Reid Kanaley, Inquirer Columnist
As the growing subprime-mortgage debacle continued to rock stock exchanges and further undermine the weak housing market, we went to the Web for evidence that anyone saw this coming. Some did, but many didn't. Happier days. "The net social evaluation of these trends is probably a strong positive," Edward M. Gramlich, a former governor on the Federal Reserve Board, said in this 2004 speech about the growth of subprime-mortgage lending. It's one more piece of evidence that the road to hell is paved with good intentions.
NEWS
June 22, 2007
Horror stories concerning so-called subprime mortgage loans have become common as more and more financially unsophisticated borrowers find themselves unable to pay their house notes. Adjustable interest rates have risen and balloon payments become due even as housing prices have dropped. So long as housing values were going up, people could pre-empt a balloon payment by refinancing at lower rates. But as the housing market collapsed in many areas, borrowers couldn't refinance. Nationally, the proportion of delinquent payments by subprime borrowers with adjustable-rate loans is at its highest in five years, according to a Mortgage Bankers Association survey.
BUSINESS
July 29, 2007 | By Harold Brubaker, Inquirer Staff Writer
Linda Reid-Williams is in trouble. Her mortgage payment is increasing about $200 next month, and she's worried she can't afford it. Her plight is an example of the pressures rocking the mortgage industry - pressures rippling through the economy that contributed to last week's stock market swoon. Reid-Williams tried for months to refinance the house she bought in Yeadon eight years ago, but recently decided against it - to avoid a $4,000 penalty for paying off her existing loan early, she said.
BUSINESS
May 9, 2007 | By Harold Brubaker INQUIRER STAFF WRITER
This year's subprime-mortgage turmoil has forced a Philadelphia specialty-finance company to record an unrealized loss of $65.6 million on its $3.6 billion portfolio of mortgage-backed securities. While Alesco Financial Inc. executives told investors yesterday that the impairment was expected to be temporary, and an analyst said that it was smaller than anticipated, the loss illustrates how the recent spike in subprime-mortgage defaults has rippled through the securities markets.
NEWS
October 21, 1999 | by Earni Young, Daily News Staff Writer
The bedraggled group gathered outside the Norwest Mortgage office at 12th and Chestnut streets hardly seemed prepared to challenge the $150 billion subprime lending industry. Yet, that is exactly what Philadelphia's ACORN Housing Corp. is prepared to do on behalf of homeowners who have been victimized by "predatory lenders. " These are mortgage companies that primarily target minority, elderly and low-income homeowners for mortgages at rates of 9 percent and higher, says ACORN director Bruce Dorpalen.
REAL_ESTATE
December 23, 2007 | By Al Heavens, Inquirer Columnist
So far, Philadelphia radio host Jay Lamont wins top prize for the most humorous reaction to President Bush's plan to streamline the process for modifying loans of certain homeowners with subprime hybrid adjustable-rate mortgages. What's being called "the interest-rate freeze" will affect only 20 percent of subprime borrowers, Lamont told his WPEN-AM (950) listeners Dec. 9. "That's about the same percentage of passengers who were saved when the Titanic sunk. " The initiative amounts to a collective agreement among mortgage lenders and servicers to freeze interest-rate resets on adjustable-rate mortgages in an attempt to forestall further rises in foreclosures, which are reaching record numbers in California, Florida, Arizona, Nevada, Michigan and Ohio.
BUSINESS
May 11, 2007 | By Harold Brubaker, Inquirer Staff Writer
Government help is on the way for some Pennsylvania and New Jersey homeowners facing unaffordable increases in monthly payments on adjustable-rate mortgages - sometimes called "exploding ARMs. " The board of the New Jersey Housing and Mortgage Finance Agency plans to issue $30 million in taxable bonds and will vote next week on rules for the program, which aims to keep subprime borrowers in their houses. In Pennsylvania, the Housing Finance Agency is planning a similar refinancing program funded initially with $25 million to $50 million in taxable bonds.
BUSINESS
October 7, 2008 | By Harold Brubaker INQUIRER STAFF WRITER
Citigroup Inc. and Wells Fargo & Co. - the two banks gripped in battle over Wachovia Corp. - were big players in the subprime-lending racket underlying the nation's persistent financial chaos. But Wells Fargo came through relatively unscathed compared with Citigroup, giving it the financial strength to throw Citigroup's government-backed deal for Wachovia into doubt last week. "They were in it longer and deeper," said Guy Cecala, publisher of Inside Mortgage Finance, in Bethesda, Md., referring to Citigroup's involvement in subprime lending.
NEWS
May 16, 2012 | By Harold Brubaker, Inquirer Staff Writer
Residential Capital L.L.C., which was a big subprime mortgage lender and still employs 1,385 in Fort Washington, filed for bankruptcy protection in New York on Monday. The move, which analysts had been expecting for months, is a reminder of the distress that festers in some corners of the financial industry following the burst of the home mortgage bubble five years ago. Ally Financial Inc., the owner of Residential Capital (ResCap), said that unloading the money-losing mortgage subsidiary and shedding certain other operations would enable it more quickly to repay the $12 billion it still owes the federal government from bailouts in 2008 and 2009.
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NEWS
August 8, 2014
NOT EVEN a decade after Wall Street gamblers took us to the brink of global economic ruin, the same players are back abusing the financial product that caused so much trouble - the subprime loan. This time the loans are for used cars sold to lower-income Americans who can't afford them. It's such a lucrative market that, according to the New York Times , subprime car loans have increased by 130 percent in the last five years. And Equifax reported this spring that subprime auto lending was the highest it has been since 2006.
NEWS
May 16, 2012 | By Harold Brubaker, Inquirer Staff Writer
Residential Capital L.L.C., which was a big subprime mortgage lender and still employs 1,385 in Fort Washington, filed for bankruptcy protection in New York on Monday. The move, which analysts had been expecting for months, is a reminder of the distress that festers in some corners of the financial industry following the burst of the home mortgage bubble five years ago. Ally Financial Inc., the owner of Residential Capital (ResCap), said that unloading the money-losing mortgage subsidiary and shedding certain other operations would enable it more quickly to repay the $12 billion it still owes the federal government from bailouts in 2008 and 2009.
NEWS
July 22, 2011
Cynthia Burton's article "A window into region's housing crisis" (Sunday) implies that irresponsible or unlucky borrowers are the cause of this crisis and fails to mention some well-researched and important facts. Repeated studies by the federal government and independent policy groups - including the Philadelphia-based Reinvestment Fund - have shown that blacks and Latinos were more likely to receive subprime loans than whites. The studies also show that within the subprime market, borrowers of color were more likely to receive the most expensive loans with increased default risk.
BUSINESS
October 24, 2010 | By Jeff Gelles, Inquirer Columnist
Imagine - the nerve of those distressed homeowners whose lawyers are demanding that banks actually prove they have the right to foreclose and evict them! As the dimensions of this latest chapter in the mortgage crisis remain unclear, it's hard not to notice how some people - many of them associated with the finance industry - want to wish away the significance of shoddy mortgage-handling practices and false "robo-signed" affidavits. It's just a "technical problem" is a common refrain.
NEWS
June 2, 2010 | By MARIE-THERES DiFILLIPPO
BEFORE THE financial collapse in 2008, I lived in the most economically powerful country in the world, and that was all I really needed to know. Now, as the nation struggles to rebuild and the job market still suffers, paying attention to the economy, and complaining about it, takes up much of my free time. I received a bachelor of arts degree from an Ivy League university in 2007, and when I came home from teaching English abroad in the summer of 2008, my bubble burst. It now seems that the exact same problems caused by the subprime mortgages are waiting for the next round of defaulters - college graduates with mountains of student-loan debt.
NEWS
May 23, 2010
Bush had a role in subprime debacle I can't argue with Rick Santorum that Fannie Mae and Freddie Mac present a very large problem, which is not being addressed by Congress or the administration ("Fannie, Freddie get a pass," Wednesday). He correctly says that in the '90s, the Clinton administration pushed the mortgage giants to take on new debt to accomplish the Democrats' affordable-housing goals. However, Santorum skipped one huge program that contributed to Fannie and Freddie's debt: The Bush administration passed the American Dream Downpayment Act in 2003 as part of its "ownership society," and then put pressure on Fannie and Freddie to increase their funding of mortgage loans to lower-income groups, particularly minorities.
NEWS
May 23, 2010
Bush had a role in subprime debacle I can't argue with Rick Santorum that Fannie Mae and Freddie Mac present a very large problem, which is not being addressed by Congress or the administration ("Fannie, Freddie get a pass," Wednesday). He correctly says that in the '90s, the Clinton administration pushed the mortgage giants to take on new debt to accomplish the Democrats' affordable-housing goals. However, Santorum skipped one huge program that contributed to Fannie and Freddie's debt: The Bush administration passed the American Dream Downpayment Act in 2003 as part of its "ownership society," and then put pressure on Fannie and Freddie to increase their funding of mortgage loans to lower-income groups, particularly minorities.
BUSINESS
February 5, 2010 | By Harold Brubaker INQUIRER STAFF WRITER
Tomorrow marks three years since Philadelphia mortgage insurer Radian Group Inc. announced a $5.5 billion deal to be bought by competitor MGIC Investment Corp. The proposed merger, driven by a slow housing market and announced amid the first tremors of the subprime-mortgage collapse, was a hint at the nation's looming financial turmoil - though that was not obvious at the time. MGIC, of Milwaukee, walked away from the deal in September 2007, after the severity of the subprime-mortgage component of the crisis became evident.
BUSINESS
December 18, 2009 | By Harold Brubaker INQUIRER STAFF WRITER
A judge ruled this week that the bankruptcy trustee of American Business Financial Services Inc. must turn over part of a settlement to firms representing investors who lost $100 million when the Philadelphia subprime lender failed in 2005. The firms are to receive at least $24 million. Of that, $12.5 million is expected to be used for the firms' fees and expenses before investors are paid. The bankruptcy trustee argued that $12.5 million was not "reasonable. " George L. Miller, the trustee, said yesterday that the judge's decision on Wednesday took the matter of fees charged by Law Debenture Trust Co. of New York and Wells Fargo Bank out of his hands.
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