Subscribe to Dollars & Sense magazine. Recent articles related to the financial crisis. This Just In...From (I haven't seen this story reproduced elsewhere yet, even in the British press. This is strange, considering it's 8.00 pm in the UK as I post) the International Herald Tribune:U.K. takes over Royal Bank of Scotland By Julia Werdigier International Herald Tribune Friday, November 28, 2008 LONDON: The British government took majority control of Royal Bank of Scotland on Friday after investors shunned the lender's share sale, paving the way for a larger government role in Britain's banking sector. Investors only signed up for 0.24 percent of the shares, which were offered as part of a plan to bolster the bank's capital, and the government had to take up the rest, leaving it with a 57.9 percent stake in RBS. The government agreed to buy a separate block of preferred shares bringing its investment in RBS to about 20 billion pounds, or $31 billion. The investment leaves taxpayers already with a paper loss of more than $3 billion, based on the closing share price Thursday. RBS was one of three British financial services companies that tapped government help to fulfill stricter capital requirements intended to help them survive the credit crisis. Lloyds TSB and the mortgage lender HBOS, which have recently agreed to combine, also relied on the government to take up any shares they could not sell to investors as part of a banking bailout plan orchestrated by Prime Minister Gordon Brown. But some analysts warned that even those stricter capital rules might not guarantee the stability of Britain's banks as the turmoil in the financial markets continued. Read the rest of the article Labels: bailout, financial crisis, HBOS, International Herald Tribune, Lloyd's TSB, Royal Bank of Scotland Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Fannie/Freddie Relief Plan for HomeownersFrom International Herald TribuneFannie Mae and Freddie Mac plan to help U.S. homeowners By Edmund L. Andrews Tuesday, November 11, 2008 WASHINGTON: Fannie Mae and Freddie Mac, the mortgage-finance giants now controlled by the U.S. government, said Tuesday that they planned a broad new effort to reduce the loan burdens of homeowners facing foreclosure. The program will be offered to people who are at least 90 days behind on their payments, according to government officials. The goal will be to modify the mortgage - most likely by reducing the interest rate - so that the monthly loan payment is no higher than 38 percent of the borrower's monthly income. The government plan could help as many as 300,000 families that are delinquent in their mortgage payments, and the costs would ultimately be picked up by taxpayers. But people with knowledge of the details said Tuesday that it was more limited than a program advocated by Sheila Bair, chairman of the U.S. Federal Deposit Insurance Corp. The plan may apply only to so-called conforming mortgages that Fannie Mae and Freddie Mac have guaranteed. While there are trillions of dollars worth of those loans, they are far more conservative than, and generally separate from, the bulk of subprime loans that are at the heart of the nation's foreclosure crisis. The foreclosure rate on loans owned by Fannie Mae is about 1.72 percent. By contrast, the foreclosure rate on adjustable-rate subprime loans is nearly 20 percent, according to the Mortgage Bankers Association. Nevertheless, officials said the new program amounted to the biggest ever government-funded effort to refinance people with substantially less-expensive mortgages in order to keep them in their homes. Read the rest of the article Labels: bailout, Fannie Mae, financial crisis, Freddie Mac, housing bubble, International Herald Tribune Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). |
