Stocks fell on Wednesday as fear of more credit market turmoil raised worry about prospects for the economy and profits. New York Attorney General Andrew Cuomo said his office was sending subpoenas to government-sponsored mortgage financiers Fannie Mae and Freddie Mac as part of a probe of the home loan industry.
New York Attorney General Andrew Cuomo announced on Wednesday that his office was sending subpoenas to Fannie Mae and Freddie Mac as part of his expanding probe of the home mortgage industry. The subpoenas seek information on the mortgage loans that the two companies purchased from banks, including Washington Mutual, Cuomo said.
Washington Mutual Inc, the largest U.S. savings and loan, said on Wednesday the U.S. housing slump will persist through 2008, causing loan losses to mount and mortgage lending to fall to an eight-year low.
New York Attorney General Andrew Cuomo is expected to announce on Wednesday he is examining what role Fannie Mae and Freddie Mac might have played in an alleged scheme to inflate appraisals of home values, sources familiar with the investigation said.
IndyMac Bancorp, one of the largest independent mortgage lenders, reported a third-quarter loss of $202.7 million due to bad loans, five times bigger than company forecasts in December.
A Federal Reserve interest rate cut this week won't be enough to save the reeling housing sector, overwhelmed by unsold homes.
Countrywide Financial Corp posted a $1.2 billion third-quarter loss on Friday as the housing market slumped, but its shares soared after the largest U.S. mortgage lender projected a return to profit this quarter as it slashes jobs and regains its footing. Shares of Countrywide rose $2.87, or 22 percent, to $15.94 in pre-market trading. Stock futures also moved higher.
Freddie Mac sharply shrank its holdings of mortgage securities in September and kept the portfolio below a growth limit set by its regulator, the second largest U.S. home funding company said on Wednesday.
Lawmakers called on Wednesday for a 'mortgage czar' to help cope with an expected wave of foreclosures from the U.S. housing slump but Alan Greenspan said the credit crunch was past the worst. Fallout from a global credit squeeze, sparked by problems in the U.S. subprime mortgage market, have rattled markets in recent weeks, threatening economic growth and bank earnings.
Pending sales of previously owned homes fell by a larger-than-expected 6.5 percent in August as more borrowers seeking home loans were turned away by cautious lenders, a real estate trade group said on Tuesday.
The housing market will stay in a slump until buyers feel more confident about the economy and their own finances, and sellers are ready to accept more realistic prices.
Countrywide Financial Corp, the largest U.S. mortgage lender, said on Monday it expects to modify terms on nearly 25,000 home loans this year to help people avoid foreclosures.
U.S. Treasury Secretary Henry Paulson said on Friday that a strong U.S. dollar was in American interests and said he was optimistic the U.S. economy would continue to grow this year.
Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson told Congress on Thursday they are open to letting Fannie Mae and Freddie Mac buy more troubled home loans if the companies control risk and agree to tougher oversight. Both had previously resisted letting the two mortgage finance companies expand their presence in the mortgage market
Stocks were little changed on Thursday as a weak outlook from economic bellwether FedEx and sharply lower profit from investment bank Bear Stearns helped stall a rally that followed this week's aggressive interest rate cut.
Federal Reserve Chairman Ben Bernanke warned Congress on Thursday that raising the ceiling on the size of loans that mortgage finance enterprises Fannie Mae and Freddie Mac can buy could undermine market discipline.
U.S. Stocks rallied for a second day on Wednesday as investors bet the Federal Reserve's aggressive rate cut would help prevent an economic slowdown. Housing-related stocks such as home builders and mortgage finance companies were among the biggest percentage gainers in the S&P 500, a day after the Fed cut the benchmark interest rates by a half-percentage point.
Fannie Mae and Freddie Mac, the biggest sources of U.S. housing finance, can buy $20 billion more in subprime mortgages under rules unveiled on Wednesday to help revive a market crippled by tighter lending standards.
U.S. stocks rose on Wednesday, adding to the previous session's surge and lifting the Standard & Poor's 500 index by 1 percent, as investors bet the Federal Reserve's aggressive rate cut would help prevent an economic slowdown.
The mortgage lending crisis deepened on Tuesday, as Impac Mortgage Holdings Inc said it will quit most lending and cancel its dividend, while Accredited Home Lenders Holding Co posted a big quarterly loss and said its survival remained in doubt.
National City Corp said on Monday it expects a third-quarter mortgage banking loss of around $160 million, the high end of its forecast, hurt by slumping housing demand and tighter capital markets.
Stock futures fell on Friday, suggesting Wall Street shares could open under pressure after British mortgage lender Northern Rock became the biggest UK casualty of the current liquidity squeeze.
