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U.S. Millionaires Told Go Away as Tax Evasion Rule Looms -
(www.bloomberg.com) Go away, American millionaires. That’s what some of the world’s largest
wealth-management firms are saying ahead of Washington’s implementation of the Foreign
Account Tax Compliance Act, known as Fatca, which seeks to prevent
tax evasion by Americans with offshore accounts. HSBC Holdings Plc (HSBA),
Deutsche Bank AG, Bank of Singapore Ltd. and DBS Group Holdings Ltd. (DBS) all
say they have turned away business. “I
don’t open U.S. accounts, period,” said Su Shan Tan, head of private banking at
Singapore-based DBS, Southeast Asia’s largest lender, who described regulatory
attitudes toward U.S. clients as “Draconian.”
FHA New Foreclosures Jump as Modified Loans Default - (www.bloomberg.com) The number of Federal Housing Administration-insured home loans entering
foreclosure jumped in March after half the mortgages it modified to ease
repayment terms were in default again a year or more later. The FHA’s role in
lending to first-time buyers with poor credit and limited cash expanded after
the 2008 collapse of the mortgage market put it at the center of government
efforts to revive housing. The FHA allows down payments as low as 3.5 percent
for borrowers with a credit score of 580, below the 640 defined as subprime by
the Federal Reserve. “The credit standards are way too loose -- you can get into
a house with very little skin in the game, and if home prices drop by a small
amount, you’re underwater,” said David Lykken, managing partner at Mortgage
Banking Solutions, an Austin, Texas-based consulting firm. “We’ve got to start
getting reasonable about standards. What they’ve done so far, some very slight
attempts at tightening, don’t really count.”
Spain wants banks to find an extra $45 billion: sources - (www.reuters.com) Spain stepped up efforts to save its troubled banks on Thursday with a
plan to make them recognize huge losses from a property crash, but uncertainty
over the final cost of a rescue hit the euro, Spanish debt and global stock
markets. The centre-right government will demand that banks set aside 35
billion euros ($45 billion) against loans to the moribund building sector, on
top of 54 billion euros the banks are already provisioning, financial sources
said late on Tuesday. This would mark the latest in a string of reform plans in
the past week which include moving toxic assets out of some banks and staging
an estimated 10 billion euro state rescue of Spain's most exposed bank, Bankia.
Spanish Credit Risk Surges to Record on Bankia ‘Zombie’ Peril
- (www.bloomberg.com) The cost of insuring against a Spanish default surged to a record on
concern a bailout of Bankia SA
(BKIA), the nation’s third-biggest lender, won’t fend off a banking
crisis triggered by bad real estate loans. “While there is no danger of an
imminent collapse at Bankia, there is a risk that it becomes a zombie bank,
which has to rely on the European Central Bank to
fund it over the long term,” said Roger Francis, an analyst at Mizuho
International Plc in London. There is growing speculation Spain may become the fourth European nation to seek a
rescue as its lenders become overwhelmed by 184 billion euros ($239 billion) of
what the nation’s central bank terms “problematic” assets linked to property.
Of the 38 billion euros of real estate the Bankia group held at the end of
2011, about half was classed as either “doubtful” or at risk of becoming so,
according to the lender’s annual report.
Too
broke to go bankrupt - (money.cnn.com)
This year,
hundreds of thousands of Americans are expected to be too broke to file for
bankruptcy. The average cost to file for Chapter 7 bankruptcy protection, the
most common form of consumer bankruptcy, is more than $1,500, according to
recent research submitted to the National Bureau of Economic Research. As a
result, anywhere between 200,000 and one million consumers are estimated to be
unable to afford that steep cost this year. The research, conducted by a group
of professors from Columbia University, the University of Chicago and
Washington University in St. Louis, examined how bankruptcy filings spiked
after people received their tax rebates in previous years.They estimate that
another 200,000 consumers, who would otherwise not have enough money to file,
will use their tax refunds to pay for bankruptcy this year.
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