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Risk Rises on 20% of Boom-Era Home-Equity Loans - (www.bloomberg.com) As
much as 20 percent of home equity lines of credit worth $79 billion are at
increased risk of default as their payments jump a decade after the loans were
made during the U.S. housing boom, according to TransUnion Corp. Borrowers face
rate shocks as payments on the credit lines, known as HELOCs, switch from
interest-only to include principal, causing monthly bills to surge more than 50
percent, according to a report today by the Chicago-based credit information
company. The 20 percent of borrowers most in danger of default are property
owners with low credit scores, high debt-to-income ratios and limited home
equity, said Ezra Becker, TransUnion’s vice president of research. Maturing
home equity lines, which allow borrowers to use the value of their home as
collateral on loans for personal spending, are the last wave of resetting debt
from the era of high property values and easy credit before the 2008 financial
crisis. The three biggest home equity lenders --Bank of America Corp. (BAC), Wells Fargo & Co., JPMorgan Chase & Co. (JPM) -- held 36 percent of the $691.5 billion
debt as of the first quarter, according to Federal Reserve data.
Court
calls BP 'reckless'; BP says 'you're wrong!' - (www.cnbc.com) A Louisiana federal court lambasted BP for
the massive 2010 oil spill in the U.S. Gulf Coast on Thursday, saying the
incident was a combination of "gross negligence" and
"reckless" conduct by the oil giant and other oil producers — a
judgment the company strongly rejected. In a sharply worded ruling, the British
oil company, Offshore Deepwater Drilling and Halliburton are "each liable under general
maritime law for the blowout, explosion and oil spill," but Europe's
second largest oil company shoulders the overwhelming part of the blame, the
U.S. District Court for the Eastern District of Louisiana determined.
Secret
Network Connects Harvard Money to Payday Loans - (www.bloomberg.com) Alex
Slusky was under pressure to put the money in his private-equity fund to work. The
San Francisco technology financier had raised $1.2 billion in 2007 to buy and
turn around struggling software companies. By 2012, investors including Harvard
University were
upset that about half the money hadn’t been used, according to three people
with direct knowledge of the situation. Three Americans on the Caribbean island
of St. Croix presented a solution. They had built a network of payday-lending
websites, using corporations set up in Belize and the Virgin Islands that
obscured their involvement and circumvented U.S. usury laws, according to four
former employees of their company, Cane Bay Partners VI LLLP. The sites Cane
Bay runs make millions of dollars a month in small loans to desperate people,
charging more than 600 percent interest a year, said the ex-employees, who
asked not to be identified for fear of retaliation. Vector’s investment in Cane
Bay shows the continuing allure of the payday-loan business, even after most
states from California to New York restricted or banned it to protect
consumers. The crackdown has driven borrowers online. Internet payday lending
in the U.S. has doubledsince 2008 to $16 billion a year, with half
made by lenders based offshore or affiliated with American Indian
tribes who
say state laws don’t apply to them, according to John Hecht, an analyst at Jefferies
Group LLC in San Francisco.
Family
Loses Virginia Home as Regulators Target Nonbanks - (www.bloomberg.com) Ranjan
and Gita Chhibber said they failed in their year-long effort to save their Ashburn,
Virginia, home because of forces beyond the couple's control -- a $1.3 billion mortgage deal
between Bank of America Corp. (BAC) and Nationstar Mortgage Holdings Inc. (NSM). After the Chhibbers lost a small business and
a chunk of their income in 2013, they spent three months working with Bank of
America to modify their loan. Before it was done, the bank sold their mortgage
last year to Nationstar, a nonbank servicer that has tripled in size in two
years. That’s when the modification went off the rails, Gita said.
UK
Spends $80 Million On Massive "Ring Of Steel" to 'Protect'
Politicians At NATO Summit - (www.zerohedge.com) Last
week, many woke up to news that the UK had raised its terror
threat level
from “substantial” to “severe.” Considering the competence and
trustworthiness of the nation’s Joint Terrorism Analysis Centre,
there must be some specific threat they’re concerned about to justify
instilling fear in a population of 65 million. Nope. Although the new threat
level rates the risk of an attack on the UK to “highly likely,” Home
Secretary Theresa May stated that “there was no evidence to suggest one was
imminent.” Well then. It makes you wonder if the the change in threat
level is being used in part to justify the extraordinary $80 million sum spent
on building a fortress around the Newport and Cardiff city centers in
Wales, which many are describing as “similar to the Berlin Wall,” or a “zoo,”
in anunprecedented display of protection for many of the world’s most corrupt
politicians.
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