Effort to help homeowners shows limits of persuasion approach

In late October 1907, the American financial system appeared to be on the verge of collapse. The trouble had begun with a seemingly minor event—a failed attempt at stock-market speculation by a bank owner named F. A. Heinze—but it spread quickly after news of Heinze’s losses prompted a run on his banks by worried depositors.

In a matter of days, financial institutions with connections to Heinze were facing similar withdrawal frenzies, and the stock market was falling precipitously. Amid the turmoil, the financier J.P. Morgan stepped in. Consulting with the Treasury Department, which committed millions in deposits to weak banks, Morgan browbeat bankers into bailing out struggling institutions, funnelled money to cash-starved brokers and even convinced clergymen in New York City to dedicate their Sunday sermons to the need for “calmness and confidence.”

Within a few weeks, the fear and chaos had subsided, and the “panic of 1907” left only a small dent in the U.S. economy. A hundred years later, in the midst of what you might call the panic of 2007, many investors are hoping that a Morgan-style rescue plan will have similarly beneficial effects. The plan, which was unveiled last Thursday, after weeks of orchestration by Treasury Secretary Henry Paulson, seeks to stabilize the chaotic subprime-loan market by freezing the interest rates of some borrowers.

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Source: msnbc.msn.com

Effort to help homeowners shows limits of persuasion approach

In late October 1907, the American financial system appeared to be on the verge of collapse. The trouble had begun with a seemingly minor event—a failed attempt at stock-market speculation by a bank owner named F. A. Heinze—but it spread quickly after news of Heinze’s losses prompted a run on his banks by worried depositors.

In a matter of days, financial institutions with connections to Heinze were facing similar withdrawal frenzies, and the stock market was falling precipitously. Amid the turmoil, the financier J.P. Morgan stepped in. Consulting with the Treasury Department, which committed millions in deposits to weak banks, Morgan browbeat bankers into bailing out struggling institutions, funnelled money to cash-starved brokers and even convinced clergymen in New York City to dedicate their Sunday sermons to the need for “calmness and confidence.”

Within a few weeks, the fear and chaos had subsided, and the “panic of 1907” left only a small dent in the U.S. economy. A hundred years later, in the midst of what you might call the panic of 2007, many investors are hoping that a Morgan-style rescue plan will have similarly beneficial effects. The plan, which was unveiled last Thursday, after weeks of orchestration by Treasury Secretary Henry Paulson, seeks to stabilize the chaotic subprime-loan market by freezing the interest rates of some borrowers.

Real Estate Designers offers totally innovative solutions for your software development, Internet programming, real estate web design and hosting needs. Our service includes domain name registration and real estate web design. Real Estate Designers provides the complete solution including design, application development and marketing.

Source: msnbc.msn.com

Paulson's plan

In late October 1907, the American financial system appeared to be on the verge of collapse. The trouble had begun with a seemingly minor event—a failed attempt at stock-market speculation by a bank owner named F. A. Heinze—but it spread quickly after news of Heinze’s losses prompted a run on his banks by worried depositors.

In a matter of days, financial institutions with connections to Heinze were facing similar withdrawal frenzies, and the stock market was falling precipitously. Amid the turmoil, the financier J.P. Morgan stepped in. Consulting with the Treasury Department, which committed millions in deposits to weak banks, Morgan browbeat bankers into bailing out struggling institutions, funnelled money to cash-starved brokers and even convinced clergymen in New York City to dedicate their Sunday sermons to the need for “calmness and confidence.”

Within a few weeks, the fear and chaos had subsided, and the “panic of 1907” left only a small dent in the U.S. economy. A hundred years later, in the midst of what you might call the panic of 2007, many investors are hoping that a Morgan-style rescue plan will have similarly beneficial effects. The plan, which was unveiled last Thursday, after weeks of orchestration by Treasury Secretary Henry Paulson, seeks to stabilize the chaotic subprime-loan market by freezing the interest rates of some borrowers.

Real Estate Designers offers totally innovative solutions for your software development, Internet programming, real estate web design and hosting needs. Our service includes domain name registration and real estate web design. Real Estate Designers provides the complete solution including design, application development and marketing.

Source : msnbc.msn.com

Trade group lifts outlook for 2008 home sales

WASHINGTON - Bucking conventional wisdom, a trade group for real estate agents on Monday said the battered housing market is on the verge of stabilizing and inched-up its outlook for 2007 and 2008 home sales.

The revised monthly forecast from the National Association of Realtors, which followed nine straight months of downward revisions, calls for U.S. existing home sales to fall 12.5 percent this year to 5.67 million — the lowest level since 2002. Last month, the association predicted 5.66 million existing homes would be sold this year.

The Realtors' group also forecast sales will rise slightly in 2008 to 5.7 million, up from last month's prediction of 5.69 million.

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Source : msnbc.msn.com

Housing crisis killing holiday-shopping spirit

Jackie Castleberry won't be playing Santa Claus this year.

She usually buys her grandchildren, nieces and nephews lots of gifts around the holidays _ bicycles, educational games, clothes — but this year she is just struggling to keep her North Las Vegas, Nev., house.

The interest rate on her four-bedroom home loan shot up in October and she is $6,000 behind on her payments. She now owes $168,000 on her home, which once was worth $220,000 but is now worth about $150,000. In the past, when times were tough, she would borrow against her home's equity — that's no longer possible.

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Source : msnbc.msn.com

H&R Block loss soars on mortgage meltdown

KANSAS CITY, Mo. - H&R Block Inc., the nation’s largest tax preparer, said in a preliminary earnings report Tuesday that it expected a huge second-quarter loss as it continued to wrestle with its disintegrating mortgage arm.

The company said it was filing its quarterly report late, blaming the decision earlier this fall to change accounting firms.

But it said it expected a net loss of $502.3 million, or $1.55 per share, for the quarter ending Oct. 31, compared with a loss of $156.5 million, or 49 cents per share, during the same period a year ago.

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Washington Mutual to lay off more than 3,000

SEATTLE - Washington Mutual Inc., the nation’s largest savings and loan, said Monday that problems in the mortgage and credit markets are forcing it to close offices, lay off more than 3,000 workers and set aside up to $1.6 billion for loan losses in the fourth quarter.

WaMu is also slashing its quarterly dividend 73 percent and plans a $2.5 billion offering of preferred stock that is convertible to common shares. WaMu has not yet priced the offering, but increasing the total number of company shares will dilute their value for existing stockholders. In after-hours trading, WaMu shares fell $1.76, or nearly 9 percent, to $18.12 following the company’s announcement.

The offering follows recent announcements by other big banks and mortgage-related companies to sell special stock to shore up their finances.

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Source : msnbc.msn.com