| Pawlenty offers help to hold off foreclosure
With housing advocates predicting no end in sight for the foreclosure crisis, which could cost 20,000 Minnesotans their homes this year, Gov. Tim Pawlenty on Friday expanded financial counseling for tens of thousands of Minnesota homeowners who are behind on their mortgage payments.Pawlenty said the state will spend another $1 million to double the number of counselors helping beleaguered homeowners.Meanwhile, the state commerce commissioner said his office is pursuing about 20 cases of potential criminal behavior by lenders and others this year, a big increase from previous years.A housing advocate said the new counseling dollars and existing state and private funding would provide help for about 26,000 households -- about one third of the households expected to be behind on their mortgages by the end of this year.
Heard Off the Street: National City at bottom of local heap
One of Wall Street's not-ready-for-subprime players is a likely candidate for this year's worst-performing stock in the PG/Bloomberg index of local stocks. Shares of National City [Ticker: NCC] are off 43 percent this year, closing Friday at $20.86, down $1.69 for the week. Most of the damage to the stock had been done before Oct. 24, when National City reported a 69 percent drop in third-quarter profits, including a $152 million loss from its mortgage banking business. Things may have been a lot worse if the Cleveland-based bank holding company had not sold its First Franklin subprime mortgage business to Merrill Lynch late last year. Included in the transaction were about $5.6 billion in First Franklin mortgages National City was holding in its loan portfolio.
Important notes on loan forgiveness
Borrowing students ought to note the College Cost Reduction and Access Act, signed into law on Sept. 27. Georgetown Law Professor Philip Schrag analyzes the Act in the Fall 2007 Hofstra Law Review, available at www.capenet.org/new.html.
"Congress," notes Professor Schrag, "significantly reduced the period (10 years rather than 25) after which public servants' educational loans were partly forgiven. It also reduced monthly payments for all high debt/low income borrowers … with a new 'income based' repayment (IBR) program."
Borrowers with eligible Federal Direct Loans will have the unpaid balance of principal and interest forgiven after they have made 120 monthly payments after Oct. 1, 2007, provided that all of those payments have been made while the borrower was employed in a "public service job." Employment in such a job does not have to be for 10 consecutive years nor does it have to be with the same employer.
Asian stocks close mixed amid a volatile response to US outlook
HONG KONG - Asian stocks had another wild ride Friday as investors wrestled with worries over the subprime loan crisis, but some markets managed to rebound into positive territory on bargain hunting. It was a mixed picture across the region with Tokyo closing down 1.2 percent at the lowest level in almost three months, while Hong Kong managed to close flats after late buying. Markets were licking their wounds a day after Thursday's brutal sell-off, with the mood still nervous after another tough day on Wall Street and a bleak message from US Federal Reserve chairman Ben Bernanke on the US economy. The weakness of the greenback was also a concern as the euro hit a fresh record high of 1.4738 dollars. Shanghai, which has lost about one-tenth of its value in little more than a week, ended down 0.27 percent, while Singapore dropped 2.0 percent.
Big debts? You're also at risk from fraud schemes
People who feel swamped by debt have another reason to worry: They're more likely to fall victim to fraud - even frauds that have nothing to do with increasing one's income. Roughly 30 million Americans - about 13.5 percent of the adult population - lost money to fraud in 2005, according to a survey the Federal Trade Commission released Monday. The telephone survey looked at 14 specific frauds, ranging from advance fee loans to work-at-home programs. Identity theft wasn't addressed. Some of the FTC results were surprising: People who admit taking on more debt than they can comfortably handle are more likely to fall victim to fraud than people who feel in control of their finances. That's true even when the scam is unrelated to money: Debt-swamped adults, for example, were three times as likely as others to have fallen for weight-loss scams.
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