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Minnesota Man In Foreclosure Prosecuted For Stripping Building - (www.housingdoom.com) "We've been talking about foreclosure-stripping for years around here-- that practice of homeowners in foreclosure removing everything that's not nailed down and selling it, as well most of the stuff that IS nailed down. While mortgage contracts generally spell out that this is not allowed, the practice has been widespread, and homeowners have little fear of prosecution." With his building under foreclosure, Donald Mordal decided to take some items that he says belonged to him. Now, he’s facing criminal prosecution, only the second person charged in Anoka County in the past 25 years under a 1963 state law. The law makes it a felony to remove or damage property subject to a mortgage with intent to hurt the property’s value. It is so rarely used that officials in the Hennepin and Ramsey county attorney’s offices couldn’t recall prosecuting anybody under it. Mordal, a businessman in Nowthen, was one of many Minnesotans caught in the foreclosure crisis. After years of building his business, he couldn’t make his mortgage payments in June 2009, and the bank foreclosed on the 7,600-square-foot building he’d helped construct. With it sitting empty, the charges say, he removed some doors and windows, plumbing, cabinets and landscape boulders he had bought and installed.
Stress Tests Compromised by Greek Non-Default - (www.bloomberg.com) European regulators’ attempts to bolster confidence in the region’s banking industry today are being undermined by their unwillingness to test for a Greek default and a mutiny by Germany’s Landesbank Hessen-Thueringen. The European Banking Authority will release the results of the stress tests for 91 banks as part of an effort to reassure investors the region’s banks have sufficient capital. Helaba, as the landesbank is known, refused to allow the EBA to publish its results in full, saying the EBA’s data “would lead to a halving of the core capital without legal grounds.” German regulator Bafin has also attacked the London-based EBA. Bafin Chairman Jochen Sanio said last month the watchdog lacks “legitimacy.”
Muni Default Plunge Belies Whitney as Borrowers Shun Insolvency - (www.bloomberg.com) Time is running out on the credibility of Meredith Whitney, who has yet to acknowledge that her eight-month-old prediction of widespread defaults this year in the market for state and local government debt is proving unfounded. Defaults fell 60 percent in the first half of 2011 compared with the same period last year, including a $12.5 million Austin, Texas, apartment project that made a late payment in June, according to Distressed Debt Securities Newsletter. Whitney, the analyst who rose to prominence by predicting Citigroup Inc.’s 2008 dividend cut, predicted “hundreds of billions of dollars” of municipal defaults within 12 months in a Dec. 19 “60 Minutes” broadcast, fueling a wave of selling in the $2.9 trillion market. Instead, the number has fallen as cities slashed spending to balance budgets and state lawmakers stepped in to guard against insolvency and local bankruptcies. “The data is not helping Meredith,” said Matt Fabian, a managing director at Municipal Market Advisors, a financial- research company based in Concord, Massachusetts. “It’s always been a possibility there would be a wave of defaults. You can’t say that it’s zero but it’s given no sign of starting.”
Weiss Ratings Downgrades United States Debt to C-Minus – (www.weissratings.com) Weiss Ratings, an independent rating agency of U.S. financial institutions and sovereign debts, has downgraded the debt of the United States government from C to C-minus. The C-minus rating for the U.S. reflects a continued deterioration in the weaknesses cited in the Weiss Ratings release of April 28, 2011, including heavy debt burdens, shaky international stability, and poor economic health. Weiss Ratings senior financial analyst Gavin Magor commented: "Our downgrade today is not contingent on the outcome of the debt ceiling debate in Washington. It is driven exclusively by the numbers, which indicate that, in addition to a decline in the long-standing weaknesses we noted three months ago, the U.S. has already lost the golden halo that helped guarantee liquidity and acceptance of its government securities in global markets."
Ambac $1 billion subprime lawsuit vs JPMorgan revived - (www.reuters.com) A New York state appeals court revived Ambac Financial Group Inc's $1 billion lawsuit against JPMorgan Chase & Co over an investment vehicle that in 2007 and 2008 suffered heavy losses from toxic subprime debt. The court said Ambac "has sufficiently alleged gross negligence" by JPMorgan, whose Chief Executive Jamie Dimon was said to have concluded as early as October 2006 that subprime mortgages "could go up in smoke." Ambac accused JPMorgan of breach of contract over losses that its Ambac Assurance unit suffered on notes it guaranteed for Ballantyne, a special purpose vehicle established to reinsure term life insurance policies.
OTHER STORIES:
Europe's banks brace for clutch of health test failures - (www.reuters.com)
Europe's banks brace for clutch of health test failures - (www.reuters.com)
Berlusconi Faces Final Budget Confidence Vote - (www.bloomberg.com)
China Foreign Investment Rises to $60.9 Billion as Companies Woo Consumers - (www.bloomberg.com)
Merkel Fails to Evoke Kohl as Boom Brings No Gain - (www.bloomberg.com)
Weakening U.S. Consumer Income Expectations Point to Slowdown in Spending - (www.bloomberg.com)
U.S. Consumer Prices Fall on Drop in Fuel Costs - (www.bloomberg.com)
N.Y. Area Manufacturing Contracted in July - (www.bloomberg.com)
Debt limit: U.S. outreach to banks, investors over possible default comes up empty - (www.washingtonpost.com)
Debt face-off shifts to Congress, bargain in play - (www.ap.com)
Bernanke Damps Additional Stimulus Prospects - (www.bloomberg.com)
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