Interesting Personal Debt News Links (February 10, 2009)

February 10, 2009

* Church of England investment chief warns of financial crisis ‘doomsday machine’ (Martin Beckford, Telegraph)

Andreas Whittam Smith, the First Church Estates Commissioner, said governments around the world had unwittingly created the conditions of the current “deep” recession by encouraging globalisation and relaxing bank regulation in recent decades.

* One in five home owners ‘could end in negative equity’ (Telegraph)

A drop in house prices by as much as 30 per cent on 2007 levels could occur, leaving some 2.5 million people around 21 per cent of mortgage holders owing more on their homes than they are worth as property prices fall in 2010 and beyond, it warned.

* Fraud sentence exceeds 12 years (Kansas City Star)

A federal judge in Kansas City, Kan., this week sentenced a Leawood man to more than 12 years for a scheme in which he and others used fraud to get $12 million in home loans.David Kostelec, 54, pleaded guilty in October to one count of conspiracy to commit wire fraud and money laundering, and one count each of providing false information to lenders and aggravated identity theft.Hi…

* Mortgage rates edge up again; remain above 5 percent (Philadelphia Business Journal)

The average interest rate for a 30-year fixed-rate mortgage keeps rising, hitting its highest number last week since the first week of December, according to real estate Web site Zillow.com.

* PM’s adviser blamed for collapse of HBOS (Andrew Grice, The Independent Online)

The Government’s crisis over the banks deepened last night when one of Gordon Brown’s key advisers was accused of sacking a whistleblower who predicted that reckless lending by banks would end in disaster.

* The SEC’s big failure (San Francisco Chronicle)

The SEC has failed miserably in its mission to protect investors and capital markets over the last several years. It was asleep at the wheel for the entire mortgage bubble, allowing banks to run rampant with easy credit and complicated financial products that few people understood. It even managed to ignore Bernard Madoff’s $50 billion confidence game – and now House representatives are accusin…

* Commercial, multifamily mortgage originations fall (Washington Business Journal)

Commercial and multifamily mortgage loan originations plummeted 80 percent in the fourth quarter of 2008 when compared to a year earlier, according to the Mortgage Bankers Association .

* GOP mortgage rate plan dies (Peter Hong, Los Angeles Times)

The Senate just killed a proposal to drive mortgage rates down to 4% to 4.5%. The amendment to the stimulus bill would have had Fannie Mae and Freddie Mac buying those low-rate mortgages on the secondary market. Jumbos would not have been included.

* Timothy Geithner pledges forceful attack on banking crisis (Martin Crutsinger)

WASHINGTON ??? Treasury Secretary Timothy Geithner said Tuesday the new administration will wage an aggressive battle against the worst financial crisis in seven decades through programs designed to increase consumer lending and remove toxic assets from banks’ balance sheets.

* Leawood man sentenced in home loan fraud (Kansas City Star)

A federal judge in Kansas City, Kan., this week sentenced a Leawood man to more than 12 years for a scheme to get $12 million in home loans.David Kostelec, 54, pleaded guilty in October to one count of conspiracy to commit wire fraud and money laundering, and one count each of providing false information to lenders and aggravated identity theft.His sentence was 154 months.F…

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